Building a startup that aims to disrupt one of life’s big purchases meant Go founder Michael Beauchamp was taking on a unique amount of debt early in the startup’s life.
When the New York-to-Ardmore transplant was launching the car subscription service back in 2020, he knew the company needed inventory. The startup, which functions as an alternative to car ownership, allows users to pay a monthly subscription fee for a vehicle instead of buying it outright or leasing. A user can find a car online in Go’s inventory, get approved and insured, and have their vehicle delivered on the day and time of their choosing.
When the company raised $41 million last fall, it took on $38 million of debt and $3.25 million of equity capital, the founder said. Why the mix?
“Our model was very specific in that we had to raise equity for operations and debt equity to purchase the vehicles,” Beauchamp told Technical.ly. “I’ve been telling investors lately, I’m envious of companies raising solely equity. I just got off a call with our lender, and two calls with VCs. I feel like we’re constantly raising.”
The founder also notes that a SaaS company would have probably been more straightforward, but software wasn’t the solution to revolutionizing the car user process, he said.
“We have to be asset-heavy,” he said. “But we don’t have the infrastructure in locations to worry about.”
Constantly raising is right: The founder said the company took on nearly $5 million in equity earlier this year, and is setting out to raise a $18 million Series A round this summer that will focus on company growth. The startup now employs 14 people, mostly in the Philly area, and plans to double in size this year.
They just launched the Series A two weeks ago, and while Beauchamp was expecting some of the doom and gloom of the current VC landscape, it’s going well so far. It’s likely because they’re far from a Series D; fundraising bigger rounds can be somewhat of a “Hunger Games” scenario right now. The capital is going toward ongoing projects to invest in the company’s technology, marketing, brand awareness and growing its team.
Beauchamp is on his third venture, previously running a B2B outdoor advertising business in New York and founding a scooter company in Nashville. He moved to the region in 2020 as one of the thousands of people who made Philly home after leaving New York.
One current struggle Beauchamp said he’s excited to surpass is the ongoing chip shortage, which is making the manufacturing of new cars slow, and driving up the price of used cars. You’ll soon see a lot more choice of vehicles on Go’s platform, the founder said, and his team will be able to work their way through the waitlist of people requesting certain cars in the eight markets they serve.
“I think later this year, we will have something for everybody,” he said.-30-