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iA Financial Group has invested $25 million into AutoCanada’s new F&I online business on Kijiji’s marketplace. mazda mx30
This investment gives iA Financial Group a 10% equity interest in the business unit that will sell finance, insurance and warranty products to buyers of private owner-sold vehicles on Kijiji.
AutoCanada first announced the integration with Kijiji back in March of 2023, with a release highlighting the integration of consumer solutions developed by AutoCanada’s used digital business on Kijiji.
The partnership between AutoCanada and iA isn’t new. iA has been the only provider of insurance and warranty products for AutoCanada’s new-vehicle dealerships since 2018.
This marks a renewal of the arrangement, and it is now extended to cover AutoCanada’s used-vehicle dealerships and the online consumer-to-consumer F&I business on Kijiji, as well.
Further, AutoCanada announced it has bought the minority 19.1% interest in its used digital division from Paul Antony, the executive chairman of the dealer group, and other investors, for $23.9 million in cash.
These moves were funded by the iA investment plus $7.5 million in share units issuable to Antony, AutoCanada said in a press release. The former used digital division minority interest holders will use the after-tax cash proceeds to purchase AutoCanada shares in the market.
“This transaction increases the company’s ownership in the Used Digital Division, while also removing any possible conflicts with other business segments and aligning management with shareholders ahead of a material ramp in the used digital Kijiji online operations,” Stephen Green, lead independent director of AutoCanada, said in a press release. “The board looks forward to working with Mr. Antony and the rest of the team at AutoCanada to advance the used digital business, which we believe has significant potential.”
Back in March 2023, the rights were secured to place the online consumer-to-consumer F&I Business solution and the ‘instant cash offer’ used-vehicle acquisition solution on the Kijiji marketplaces.
After this step was complete, the dealer group began building the operational foundation for the online C2C F&I Business, including engaging in discussions with iA regarding the supply of insurance and warranty products for this new initiative.
These discussions ended with the proposal for the now secured direct investment by iA.
AutoCanada plans to enhance and grow the initiative with online seller Kijiji.ca, the press release said.
The online F&I initiative will operate a solution that is placed on Kijiji’s online marketplaces targeted to buyers of private for-sale-by-owner vehicles listed on the marketplaces.
iA will be the provider of insurance and warranty products for the Kijiji initiative, and has invested the $25 million for a common equity interest in the newly created subsidiary of AutoCanada UDLP that owns and operates the online C2C F&I business.
AutoCanada explained in the press release UDLP was formed in 2020 to own and operate the non-OEM used-vehicle business of AutoCanada, subject to certain exceptions, and to facilitate the issuance of equity incentives of UDLP.
The business of UDLP currently includes used-vehicle dealerships, a used-vehicle auction and an online “instant cash offer” used-vehicle acquisition solution, in addition to the online C2C F&I Business with Kijiji.
electric suv Once the dealer group was made aware of iA’s interest in a direct cash investment in the online C2C F&I Business, Antony discussed the possibility of the company using the proceeds to facilitate consolidation of the UDLP minority interest.