Why Scott Painter Is Selling His Beach House to Start a New Vehicle Software Company

Serial entrepreneur Scott Painter’s plan to construct an all-electric subscription automotive company called Autonomy has backfired, so he’s back on what he calls the “hardest build” of his profession.

While Autonomy will proceed to operate the small fleet of 1,000 cars it has amassed over the past few years (a far cry from its stated goal of 23,000), Painter is starting a recent company called Autonomy Data Services, or ADS for brief, he told TechCrunch in an exclusive interview.

The recent company will provide a software platform and data to automakers looking to run their very own subscription services for electric, gas, recent and even used cars. Painter says he’s also in talks with automotive dealers, fleet operators and even firms that sell construction and agricultural equipment but might want to offer subscriptions. He says an early version of the service is already generating revenue.

Painter says ADS is in negotiations with multiple automakers, including three which have previously operated their very own subscription service. The company is partnering with Deloitte to run the service; ADS will get a share of the revenue as a software-as-a-service provider, while Deloitte will charge automakers (or other customers) for customizing the platform.

It’s one other twist for Painter, who has had a difficult few years. After stepping down as CEO of automotive retailer TrueCar in 2015 (a company he founded in 2005), he launched automotive leasing startup Fair, which has received greater than $300 million in funding from SoftBank. That’s over poorlyEarly investors accused SoftBank of leading the corporate into failure, and Painter ultimately resigned as CEO in 2021.

His last shift wasn’t easy either.

To make all of it occur, Painter had to persuade Autonomy’s investors, a few of whom were underwater when the subscription service never took off as promised.

“Our lenders had something called senior secured status; they could kill the company and try to liquidate the fleet” to get a few of their a refund, he says. But he worked with them to convert $32 million of debt in Autonomy into equity in ADS.

He also says he had to “do some personal digging,” including selling his $6 million beach house on Pacific Coast Highway, mortgage one other property and “sell a lot of assets I didn’t want to sell.”

“It was the hardest job I’ve ever done as an entrepreneur,” he says, describing the method as “hugging a cactus.”

Data takeover for a six-figure sum

Autonomy was already struggling last yr when Elon Musk’s aggressive price cutting destroyed it the worth of a small fleetmost of them were Teslas. (Painter, who knows Musk personally, says he tried to “instill in Elon the importance of being more predictable with discounts,” but to no avail.)

The problem this time is that the majority major automakers have already tried subscription services. And just about all of them have abandoned the concept.

Painter says that happened because automakers “didn’t yet have the fidelity or understanding of how subscriptions would work.” Because all of those subscription services from automakers were brand recent, 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, it’s really hard to set prices, Painter says, which is why automakers have charged high prices for his or her subscription services, scaring customers away.

That kind of knowledge is one in every of the things it plans to offer through ADS. And it’s not only coming from Autonomy customers. Painter quietly bought the assets of bankrupt used-car marketplace Shift Technologies earlier this yr for lower than $1 million. In the years leading up to its demise, Shift bought Painter’s former car-leasing startup Fair, which had previously acquired Ford’s subscription service Canvas—returning the remnants of its former business to its own ownership—and Uber’s leasing service Xchange.

Data from all of those firms may be used to predict “how long people stay in their cars based on their customer cohort, what their FICO score is, how much income they have, and so on and so forth,” Painter says. That’s essential not only since it provides certainty, but additionally because the flexibleness of subscription services is attractive to customers with lower credit scores.

Painter says that as well as to customer data, he obtained all source code, patents, trademarks, and compliance and legal “work product” from these bankrupt firms, which he says should make it much easier for ADS to relaunch its business for patrons in recent markets.

In total, he says he received greater than a terabyte, jokingly calling it “an astonishing avalanche of sh—.”

“My IT people were just saying, ‘What are you going to do with all this?’ It just kept coming,” he says. But, he notes, the businesses that generated all that data “spent a combined $1 billion developing the software” he now owns and uses at ADS.

“I mean, when (SoftBank CEO) Masayoshi Son finds out that I managed to buy all of Fair’s assets and intellectual property for less than a million dollars, I mean, it’s just going to kill him,” he jokes.

And while he has raised $2.5 million in enterprise funding, the work isn’t done. “We’ve done everything we need to do to make (ADS) an investable business. Now we’re just looking for an equity partner who’s willing to put in $5 million to $8 million,” he says. “That gives the company two years to get up and running so it can continue to grow with Deloitte.”