You receive a link from a seller to pay for the car you are going to buy. Should you trust it?
Seattle startup KeySavvy wants to help by tackling fraud and simplifying private vehicle transactions.
Co-founder and CEO Andrew Crowell started his career as a software engineer working at various automotive companies, drawing on his passion for cars. In 2015, Crowell was CTO at TRED, a Seattle-based peer-to-peer online vehicle marketplace and transaction platform, where he met his co-founder Jason Hoetger, former head of engineering at TRED. Prior to TRED, Hoetger was a software engineer at REI and OfferUp.
While at TRED, Crowell and Hoetger learned about the prevalence of fraud in the private car sales market, where buyers and sellers interact directly. They founded KeySavvy in June to create a safer way for buyers and sellers to handle vehicle transactions so both parties can focus on getting the best price, according to Crowell.
KeySavvy is a peer-to-peer vehicle payment platform that aims to eliminate the risk of title fraud for buyers and payment fraud for sellers. It is aimed at consumers hoping to maximize value through the private market, but hesitant because of the risk of fraud.
After the buyer and seller independently agree on the vehicle price, the seller sends a KeySavvy payment link to the buyer. After the buyer accepts the price, both sides electronically sign the necessary documents and “shake hands” to accept the deal. This starts KeySavvy’s verification process.
As a licensed auto dealer, KeySavvy obtains records directly from state DMVs along with other third-party sources to verify the identity of the seller and buyer, and determine the vehicle’s ownership history. If no red flags are raised, the buyer can collect the car and the seller receives payment through KeySavvy.
Buyers are charged a flat transaction fee of $49, and sellers pay no fees unless they have a lien. According to Crowell, in less than 30 minutes, KeySavvy guarantees buyers with a clear title and registration, and sellers with a confirmed payment.
According to Crowell, KeySavvy’s biggest challenge has been overcoming the consumer trust barrier with a business model based on an online payment link.
“I think we can lower that trust barrier by being the teacher,” Crowell said. “Not everyone knows that they can buy a car that they end up not being able to register and they drive this car illegally and they’re just stuck with it.”
The KeySavvy blog has articles on tips for buyers and sellers on vehicle transactions, and also includes a collection of Reddit posts about people getting scammed in the car buying process.
KeySavvy is bootstrapped and currently has two full-time employees.
We caught up with Crowell for this startup spotlight. Read on for his answers to our questionnaire. Answers have been edited for brevity and clarity.
Our strategy to expand our customer base: Our primary source of customer acquisition is partners. They are very eager to work with us because they realize that by referring their customers to KeySavvy, their customers will have a better experience. We eliminate so much of that potential risk and make it easier for them to get a better value.
The smartest move we’ve made so far: Positioning KeySavvy to partner with other great companies that our customers already use. By not being a marketplace, we can only focus on the primary pain point, which is the transaction. There are already a bunch of great sites – Tred, CarGurus, Craigslist, Facebook – all of which are fantastic sites to list your car for sale and find a buyer. But no matter which marketplace you choose, KeySavvy is the safest and easiest way to complete your sale.
How the turbulent economy has affected our business: When you start with zero market share, it doesn’t matter. On a macro level, this is a very good business to get into. Generally, the auto industry is pretty resilient to economic downturns because a lot of people just need a car.
The car market has been very strange lately. This has pushed prices up. I don’t think it affects us that much, other than people looking for better deals trying to get the most value out of their car. And it’s driving people towards the private market, which is great.
The biggest mistake we’ve made so far: Not only do we have to get buyers, but we also have to get a seller and one of those parties found out about us through the other party, who they probably don’t trust. So how do we gain this consumer’s trust? We underestimated it – we haven’t been in business long enough to make too many mistakes, but it’s one where we underestimated how high it would be.