TrueCar, a publicly traded U.S. automotive marketplace, has agreed to go private in a deal that would put it back in the hands of founder Scott Painter.
The company has signed an agreement in which Fair Holdings, led by Painter, would become the new owner through an all-cash deal at $2.55 per share or $227 million in total.
The announcement drove the share price up 68% from a closing price of $1.48 on Tuesday (Oct. 14) to Wednesday morning’s opening at $2.49. The price had eased to $2.36 by noon on Wednesday.
Fair Holdings said it was negotiating with various financial and strategic investors to raise funds for the acquisition. “This group is expected to comprise seasoned leaders and institutions across automotive retail, finance and technology, which are integral to Fair Holdings’ operating plan and bring the expertise to scale TrueCar’s business,” Fair Holdings said in a media release.
“Through this transaction, we are pleased to deliver compelling value to TrueCar stockholders,” said Barbara Carbone, chair of TrueCar’s board of directors. “The Board unanimously approved this transaction after a thorough and careful evaluation of potential value creation opportunities, and we are confident it is in the best interest of TrueCar stockholders and other stakeholders.”
Painter, who co-founded TrueCar in 2005 and led it until 2015, will return as CEO, replacing Jantoon Reigersman, a four-year company veteran who’s held the top spot since 2023. The announcement didn’t say what the future holds for Reigersman.
The sale, which concluded a strategic review that began late last year, is expected to close by early 2026, according to the announcement. The deal is subject to approval by shareholders and regulators. TrueCar’s largest collective stockholder, Caledonia Investments, has committed to vote in favor, the announcement said.
TrueCar ranks as the No. 7 U.S. auto site by traffic and the No. 4 pure-play auto marketplace. The company differentiates itself by offering shoppers a guaranteed price on cars that subscribing dealers promise not to negotiate once the buyer comes to close the sale.
Once a promising challenger to the top three sites (CarGurus, Autotrader.com and Cars.com), it lost favor with marketing that cast a bad light on dealerships (i.e. the company’s pitch around “the true price” inferred prices in dealer ads couldn’t be trusted).
That controversy led to a subscriber revolt and, eventually, Painter’s ouster. TrueCar’s revenues peaked in 2018 and 2019, hitting $335 million during both years. It subsequently went downhill, bottoming out at $159 million in 2023.
Alone among U.S. auto sites, TrueCar depends on car sales for its revenue. Instead of selling leads, TrueCar collects a success fee on completed transactions. This has been a challenge for the company, and it was hit especially hard during the pandemic when new-car sales declined significantly. But over the last two years, TrueCar has been growing revenue under Reigersman, hitting 12% year-on-year growth in Q2 despite a sluggish car market. Uncertainty about the economy, though, led the company to pause a hiring plan that it had hoped would propel even stronger growth.
Painter has a long history of automotive ventures. In 1998, he founded CarsDirect, the first company to sell cars online. He then founded TrueCar with Tom Taira and since leaving as CEO, he’s worked on a couple of other projects.
The biggest was Fair.com, a California-based car-subscription company that offered vehicles for a monthly fee that included servicing. Its promise of easily arranged subscriptions and car pickups with an app was meant to appeal to younger customers. However, the company, which had raised $2.1 billion in financing, burned through much of that in a hasty effort to expand across the country. Lead investor Softbank apparently lost faith, leading to massive layoffs. Painter resigned as CEO but kept a board seat.
After Fair’s demise, Painter started a couple other ventures, but the focus shifted over the years.
In April 2021, he and his former partner in Fair.com, George Bauer, launched NextCar, which offered the subscription software developed at Fair.com to third-party operators. It was meant to be an asset-light version of Fair. NextCar was rebranded Autonomy, and later, Autonomy acquired a small fleet of Teslas and became, like Fair, a subscription service, albeit one specializing in EVs.
