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.
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!