DealerTrack: Another Dominant Platform Taken Over

by | Jun 15, 2015 | B2B Software, Consolidating Competition, Industry Cloud, Key Success Factors, Supply Chain Automation, Vertical Cloud

I’ve previously professed my love for DealerTrack (TRAK), a B2B platform that built a dominant position in auto retailing here and here.  (Thanks to Peter Goldmacher at Cowen, I learned about the company and owned the stock.)    I use DealerTrack as one of my model examples of a B2B platform:

  • built organically and with acquisitions
  • focused on automating work processes
  • metrics driven
  • clear understanding of multi-sided marketplace
  • patient and focused on dominating one niche

But my love of the company, does not compare to Cox Automotive’s love which is worth $4 billion.  Cox announced today that it is offering that amount of money for the company.  The stock is up $22 from $40 to $62–a nice premium.  With car buying going well right now, they also picked a good time to sell.

The DealerTrack folks built a great company fully integrated into the auto dealer and the back office transactions in particular.  I always loved these two slides from their investor deck.  Once I saw versions of them, I was all in.

DealerTrack Network

 

 

 

 

 

 

 

 

DealerTrack Transactions

 

 

 

 

 

 

 

 

Any company trying to build an industry dominant B2B platform using the supply chain automation value proposition should study the DealerTrack story.  Apparently, Cox Automotive did!

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