Serial entrepreneur Scott Painter’s plan to build an all-electric vehicle subscription company called Autonomy has not worked out. So he’s pivoting once again to what he calls the “hardest build” of his career.
While Autonomy will continue operating the small 1,000-car fleet it assembled over the last few years — far from the stated goal of 23,000 — Painter is spinning out a new company called Autonomy Data Services, or ADS, he tells TechCrunch in an exclusive interview.
That new company will provide a software platform and data to automakers who want to operate their own subscription services for electric, gas, new, or even used cars. Painter also says he’s in talks with car dealers, fleet operators, and even companies that sell construction and farm equipment but might want to offer subscriptions. He says an early version of the service is already generating revenue.
Painter says ADS is negotiating with multiple automakers, including three that have already run their own subscription service in the past. The company is partnering with Deloitte to run the service; ADS will get a revenue share as the software-as-a-service provider, while Deloitte will charge the automakers (or other customers) to customize the platform.
It’s yet another turnaround for Painter, who has had a rocky few years. After stepping down as CEO of auto retailer TrueCar in 2015 (a company he founded in 2005), he created car leasing startup Fair, which received over $300 million from SoftBank. That ended poorly, with early investors accusing SoftBank of driving the company into the ground and Painter ultimately stepping down as chairman in 2021.
His latest pivot didn’t come easy, either.
To make all this happen in the first place, Painter had to convince Autonomy’s investors, some of whom were underwater after the subscription service never took off as promised.
“Our lenders had what’s called senior secured status; they could have killed the company and tried to liquidate the fleet” to get some of their money back, he says. But he worked with them to convert $32 million worth of debt in Autonomy into equity in ADS.
He also says he had to “personally dig deep,” including selling a $6 million beach house on the Pacific Coast Highway, mortgaging another property, and “selling a bunch of assets that I didn’t want to sell.”
“It has been the hardest build I’ve ever had as an entrepreneur,” he says, describing the whole process as “hugging the cactus.”
A six-figure acquisition for data
Autonomy was already struggling last year when Elon Musk’s aggressive price-cutting destroyed the value of the small fleet, which was mostly Teslas. (Painter, who knows Musk personally, says he has tried “to impress upon Elon how important it is to be more predictable about discounting” to no avail.)
The problem this time around is that most every major automaker has already tried subscription services. And almost every single one of them walked away from the idea.
Painter says that happened because automakers “did not have the fidelity yet, or the understanding of how subscriptions would work.” Because all of those automaker subscription services were brand new, he says, they didn’t understand how customers would behave. Would they subscribe for just a few months? Or a few years?
Without that information, Painter argues, it’s really hard to figure out pricing, and so automakers charged a lot for their subscription services – something that scared away buyers.
That kind of information is one of the things he plans to offer with ADS. And it’s not just coming from the Autonomy customers. Painter quietly bought up the assets of bankrupt used car marketplace Shift Technologies earlier this year for less than a million dollars. In the years leading up to its collapse, Shift had bought Painter’s former car-leasing startup Fair, which itself had previously acquired Ford’s subscription service Canvas — bringing the remnants of his former business back under his ownership — and Uber’s leasing service Xchange.
The data from all of those companies can be used to predict “how long people stay in cars based on their customer cohort, what their FICO score is, how much income they have, so on and so forth,” Painter says. This is important not just because it offers certainty, but because the flexibility of subscription services is attractive to customers with lower credit scores.
In addition to the customer data, Painter says he got all the source code, patents, trademarks and compliance and legal “work product” from those defunct businesses, which he says should make it very easy for ADS to get up and running with customers in new markets.
In all, he says he got more than a terabyte, jokingly calling it an “astonishing avalanche of s—.”
“My IT guys were just like, what are you going to do with all this stuff? It just kept coming,” he says. But, he points out, the companies that generated all this data “spent almost a billion dollars collectively developing software” that he now owns and is using at ADS.
“I mean, when [SoftBank CEO] Masayoshi Son finds out that I was able to buy all of the Fair IP and assets for less than a million dollars, it’s just, I mean, it’s gonna just kill him,” he jokes.
And while he’s gathered $2.5 million to fund the effort, the work is not done. “We’ve done everything that we had to do to make [ADS] an investable business. Right now we’re just looking for an equity partner that will come in for somewhere between $5 [million] and $8 million,” he says. “That’ll give the company two years of runway to then continue to scale with Deloitte.”