Numa’s $32M AI Bet is Set to Transform Car Dealerships Across North America—Here’s How

Numa, the Oakland-based AI startup, has secured $32 million in a Series B funding round, positioning itself as a transformative force for car dealerships across North America. Led by Touring Capital and Mitsui — a Japanese conglomerate and major shareholder in auto giant Penske — the round also saw participation from Costanoa Ventures, Threshold Ventures, and Google’s AI-focused Gradient Ventures. The new capital infusion brings Numa’s total funding to $48 million and sets the stage for a new chapter in the company’s mission to modernize the automotive industry with AI-driven customer service solutions.

Numa’s journey to this point has been unconventional but strategic. Founded in 2017 by Tasso Roumeliotis, Andy Ruff, Joel Grossman, and Steven Ginn, the company initially focused on a broader AI product aimed at conversational commerce. However, the team recognized the immense potential to specialize in the automotive vertical, prompting a pivot to provide highly targeted automation tools for car dealerships.

“We were early to build AI and conversational commerce,” explained Roumeliotis, who previously co-founded Location Labs, a family-focused security company acquired by AVG for $220 million in 2014. “But we decided to focus our AI entirely on the automotive vertical after identifying enormous opportunity in that space.” The decision has paid off, with Numa now serving over 600 dealerships across the U.S. and Canada, including some of the largest retail auto dealerships in the world.

Roumeliotis and his team bring a wealth of experience to the table. Joel Grossman, Numa’s Chief Product Officer, was instrumental in shipping major Microsoft products like Windows XP, while Andy Ruff, another Microsoft veteran, led the team that created the first Outlook client for Mac. Their shared expertise in technology development and strategic execution has shaped Numa into a company that deeply understands its niche.

But why focus so heavily on car dealerships? The automotive industry, representing a staggering $1.2 trillion market in the U.S. alone, has been slow to adapt to digital transformation, especially in areas like customer service and real-time communication. Traditional dealerships are often bogged down by outdated legacy systems, leading to inefficiencies and a failure to meet modern consumer expectations. A recent survey found that one-third of dealers miss at least 20% of incoming calls, resulting in missed opportunities and lower customer satisfaction scores.

That’s where Numa steps in. The company’s platform leverages AI to handle a range of tasks, from rescuing missed calls to booking service appointments and providing status updates on ongoing repairs. For instance, if a customer calls a dealership but hangs up before speaking to an agent, Numa can automatically follow up with a text or a reminder call. The system can also collect information for trade-ins and help coordinate service between departments, freeing up dealership staff to focus on more high-touch interactions.

“Dealership service leaders and employees are constantly running around, juggling customers in person, checking on cars and parts, and dealing with ringing phones,” said Roumeliotis. “Numa brings that all together in a way that’s designed to work with the dealership, not disrupt it.”

Priya Saiprasad, co-founder and general partner at Touring Capital, underscored the value of this tailored approach: “Numa redefines how dealerships engage with customers to deliver a delightful experience that enhances loyalty while also driving profitability.”

The key to Numa’s success lies in its proprietary in-house models, which are trained on industry-specific datasets from OEMs (original equipment manufacturers) and dealership management systems, as well as real conversations between dealerships and their customers. This granular understanding of dealership workflows gives Numa an edge over more generic automation tools on the market, such as Brooke.ai and Stella AI, which offer customer service automation but lack the deep integration and customization that Numa provides.

While some might raise concerns about data privacy — particularly around whether dealerships were informed that their data was being used to train AI models — Roumeliotis emphasized that the system is built around a continuous feedback loop between dealerships, customers, and the AI itself. He did not elaborate further on the specifics of data consent but maintained that the platform’s focus is on creating better experiences for end-users while respecting dealership relationships.

The funding round will primarily be used to accelerate product development, expanding Numa’s team of AI and machine learning engineers to refine and enhance their models for the automotive vertical. With 70 employees and counting, the company is looking to build out new features that go beyond the basics of customer service automation, tackling more complex issues like converting dissatisfied customers into brand advocates and optimizing internal dealership processes.

“Today’s consumers expect fast, seamless interactions across all platforms,” said Roumeliotis. “Many dealerships struggle to meet these expectations, especially in areas like real-time communication, service updates, and personalized experiences, which AI can help address.”

The broader industry is beginning to catch on. A survey conducted last year by CDK Global revealed that 67% of dealerships are already using AI to identify sales leads, while 63% have deployed it for service-related tasks. With more dealerships embracing automation, Numa is well-positioned to capitalize on this shift. According to Roumeliotis, the company is “just about” cash-flow break-even, a rare feat for a young startup. Numa’s recent $32 million Series B funding marks a significant milestone for the company, but it’s not the only cause for celebration. The investment comes on the heels of Numa’s impressive rise to number 168 on the 2024 Inc. 5000 list

The road ahead for Numa is clear: continue refining its platform to cater specifically to the unique needs of car dealerships while expanding its footprint in North America. With its latest round of funding, Numa is poised to not just participate in, but lead, the transformation of customer service in the automotive industry. The team’s next focus? Building an AI-native dealership model that’s set to redefine how dealerships operate, creating a smarter, more customer-centric experience across the board.