AutoWeb Acquires Assets of Vehicle Acquisition Company CarZeus to Expand Matchmaking Capabilities

Transaction Extends Company Further into Used Cars, Increasing TAM

  • Acquisition of Assets a $400K All-cash Purchase from McCombs Family Partners and Founder
  • Company Intends to Leverage its Efficient Traffic Acquisition Capabilities, Management Experience to Drive Growth, Improve Profitability and Scale Processes
  • Transaction Supports Product Investment Strategy to Match Consumers with Their Preferred Vehicle Transactions
  • Company Executives to Discuss the Transaction at Earnings Call Scheduled for Aug. 5

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AutoWeb, Inc., an automotive matchmaking platform connecting in-market car shoppers to their preferred vehicle transactions, announced it has acquired the assets of CarZeus, a San Antonio, Texas-based used vehicle acquisition platform that purchases vehicles directly from consumers and resells them through wholesale channels. AutoWeb intends to expand its used vehicle acquisition offering beyond CarZeus’ current San Antonio market by leveraging AutoWeb’s significant traffic acquisition capability and the management team’s depth of relevant experience.

“As a matchmaker, AutoWeb helps guide consumers through the large, complex, and multi-choice transaction of purchasing a vehicle. Providing our in-market audience with this alternative to dispose of their current vehicles is a natural product line extension,” said Jared Rowe, president and CEO of AutoWeb. “CarZeus offers an alternative disposal experience for consumers seeking to sell their cars. We believe that AutoWeb’s unique ability to efficiently identify in-market car buyers is a key differentiator that will allow us to match more of those consumers to the vehicle disposal experience they prefer.”

This acquisition positions AutoWeb to participate more meaningfully in the consumer used vehicle disposal market, which is highly fragmented and very large. Industry estimates size that market to include approximately 25 million vehicles annually with a total estimated value of approximately $230 billion. Importantly, this acquisition also supports AutoWeb’s ongoing product investment strategy to provide increasingly useful consumer experiences through its portfolio of automotive brands, including Car.com and UsedCars.com. This blended online and offline approach is intended to not only benefit consumers, but also retailers who will gain access to a new source of inventory in an efficient and cost-effective manner.

AutoWeb’s capabilities form a platform that is well-suited to support significant used vehicle acquisition growth. The company believes its efficient audience acquisition, portfolio of automotive brands, proprietary technology, and differentiated data assets combine to create a novel market position that will benefit consumers and customers alike.

“This is where we see automotive marketplaces evolving both domestically and globally,” said Rowe. “Our audience is already cross-shopping new and used vehicles online, most often with vehicle disposal as a component of their ultimate transaction or set of transactions. We plan to adopt an omni-channel engagement model that incorporates retail-ready functionality and services, like vehicle disposal, to deliver improved value to both clients and consumers.”

AutoWeb’s acquisition of CarZeus assets closed on July 31, 2021, at an all cash price of $400,000 for assets owned by San Antonio’s McCombs Family Partners and CarZeus founder Phil Kandera.

“McCombs Family Partners is proud to have guided CarZeus through its initial stages of growth and success,” said Joe Shields, director of business development for majority-owner McCombs Family Partners. “AutoWeb is well-positioned to guide CarZeus from here, so it can reach its full potential.”

Kandera, who founded CarZeus in 2017 after decades of dealership experience, has joined AutoWeb as executive director, vehicle acquisition, and will lead day-to-day operations of AutoWeb’s used vehicle acquisition business under the CarZeus brand. As an inducement for joining the company, Kandera was granted options to acquire 50,000 shares of the company’s common stock at an exercise price equal to $3.12 per share, which was the closing price of the common stock on The Nasdaq Capital Market today. The options have a term of seven years, and one-third of the options will vest on the first anniversary of the grant date and one thirty-sixth of the options shall vest on each successive monthly anniversary of the grant date for the following 24 months.

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