Interview with Scott Painter, Founder of Zag

Zag is a new, Los Angeles-based startup founded by former CarsDirect CEO Scott Painter, funded by Anthem Ventures, Arcturus Capital, Capital One, and GRP. I spoke with Scott to better understand the new firm and how it fits into the online car buying market.

BK: What is Zag all about, and what's different about Zag from other online car buying services?

SP: Zag is developing a state-of-the-art technology and services platform that makes it possible, for the first time, for the consumer to complete the entire auto-buying transaction online - everything from initial purchase support to financing to aftermarket extras and insurance.

BK: Is there space in the market for another auto-focused web site?

SP: There's always space for an innovator. Rather than operate as an online consumer destination, however, Zag will initially provide its platform as a private-label turnkey solution to auto dealers and affinity buying groups. Zag will introduce into the market new capabilities for consumers, through its dealer partners and its relationships with affinity groups. For consumers, the Zag platform will deliver the best, most hassle-free car-buying experience possible, with transparency in pricing, full-service financing and the ability to complete the entire transaction online. For dealers, Zag will deliver sales, not just leads - resulting in a much more efficient business model.

BK: Why the big secrecy on what you've been up to so far?

SP: The company is currently in a building phase. To that end, we've raised $32.7 million in total financing, recruited an exceptional team of passionate industry veterans, and acquired Autoland, the nation's largest credit union auto-buying service. We're continuing to develop our technology and services platform and to expand our national dealer network. We're laying the groundwork now, and will be increasingly visible as the year progresses.

BK: How far along is your product, and when do you think your products will be deployed at dealers?

SP: Zag will be launching an auto buying program in select markets in Q2 of this year. Southern California will be included in those launch markets.

BK: Why Autoland, and how does a car buying service fit into your technology platform?

SP: Zag is focused on developing a comprehensive solution that allows the customer to complete the entire transaction electronically. To that end, building a technology solution around an existing business is much less capital intensive and represents significantly fewer risks while creating an opportunity for additional margins.

BK: Finally, as a serial entrepreneur, have you found this time around has been much easier than your previous startups?

SP: Starting companies is always a challenge. Having a track record, relationships and a deep understanding of a particular industry certainly makes certain challenges easier to overcome. That said, I do know that I am enjoying this company and this process more than I have in the past. I love and respect the people that I am working with and we see the opportunity the same way.

BK: Great, thanks for the time!


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