Tricolor, a Dallas, Texas-based auto financing company, raised $30m in equity funding.
The company intends to use the funds to scale its platform and retail network to expand availability for its used vehicles and access to auto financing options for Hispanic customers in new markets.
Led by CEO Daniel Chu, Tricolor aims to improve the car buying experience by eliminating unnecessary fees through a business model that aligns customer impact with business outcomes and leverages artificial intelligence (AI) and machine learning. Its AI-powered segmentation model assesses nontraditional attributes for no credit and low-income consumers in order to assess intent and ability to repay.
To date, Tricolor has disbursed nearly $1 billion in auto loans throughout California and Texas via its brands, Tricolor Auto Group in Texas and Ganas Auto Group in California, which operate 36 retail dealerships across 12 markets in the two states, as well as a shared services center in Guadalajara, Mexico.
This investment follows a number of recent key milestones for the company. In November, it became the only lender among all auto asset-backed securities issuers to earn a Community Development Financial Institution (CDFI) certification from the U.S. Treasury Department.
Earlier in the year, Tricolor launched a new affiliate called Tricolor Insurance that leverages its proprietary underwriting algorithms and scoring strategies to provide low-monthly premium insurance policies to auto owners. The company will continue to expand this program alongside its growing dealer and financing network.