Trade X, a Canadian trading platform that allows automakers, fleet companies and dealers to buy and sell new and used vehicles online, has secured a US$50-million line of credit — with the potential for more — to expand its business in Canada and the United States, the company from Mississauga, Ont., says.
Trade X CEO Ryan Davidson would not name the global asset management firm providing the financing and an opportunity to acquire an additional US$50 million. He said the financing is critical for Trade X to accelerate its growth this year.
“We feel this $50-$100 million accordion is just the first of what we feel will be many [lending opportunities] that they can provide to grow our business in North America and beyond,” he said.
Business-to-business automotive cross-border sales total about US$10 billion annually. Globally, used-vehicle sales are estimated to be a US$1-trillion industry, the company said in a statement.
Founded in July, 2018, Trade X is set up as a third party to ensure the condition of vehicles being bought and sold are verified, the money exchanged is secure, the vehicle gets to its destination and that sellers are paid in their local currency with applicable taxes.
Davidson said the company will be making a “major splash” in the industry in the second quarter of this year with marketing campaigns in Canada and the United States, and will be active in conferences and events.
“Trade X will finally announce to the world that we’ve arrived,” Davidson said. “We needed to close that credit [financing] just based on the large cash requirements. It’s our plan to start with Canada to the U.S. Before the end of the year, we will have a network of global buyers on-online as well.”
Tight vehicle inventory on both sides of the border has increased U.S. demand for Canadian cars, he said.
In the first phase of the company’s launch, U.S. dealers will only be able to buy Canadian vehicles, but in phase two the American users will be allowed to sell American cars to the same global network of buyers currently only available to Canadian dealers, Davidson said.
“We basically think of it as countries of export and we will be opening Canada and the U.S. to the global network before the end of this year.”
Trade X also is planning to announce a partnership with a national inspection company that has condition report writers capable of inspecting more than 10,000 vehicles per month, said Davidson.
“We don’t need a physical location. We’re basically leveraging strategic partnerships where we can stay more asset light and use technology to scale.”