The automotive market is one of America’s largest industries, accounting for $104 billion in sales in 2023, representing 3% of GDP, according to IBISWorld. Yet many find the process of buying a car painful.
In fact, research from Cox Automotive shows consumer satisfaction with the car buying process declined in 2022 for the second consecutive year, citing high prices, limited availability, and the time required to complete the process frustrated car buyers.
Tekion Co-Founder and CEO Jay Vijayan.
Jay Vijayan also was frustrated with his car buying experience and decided to do something about it. Vijayan is the former CIO at Tesla and founder of Tekion, the first end-to-end, cloud native automotive platform creating a more seamless car-buying experience for dealers and customers.
Founded in 2016 by Vijayan, CEO and Guru Sankararaman, COO, the Pleasanton California-based software company is working to improve the car buying experience by creating software that integrates formerly segregated systems into one system that is easy to use for both consumers and dealers. This founder’s journey is based on my interview with Vijayan.
“I started my career as an engineer and programmer, just writing software. My first job in the US was at Oracle, one of the largest software companies. The seed of the idea of starting a company started back then. I felt that writing software, especially business applications, should be easy, simple and fun. So the thought process I had was, why would consumer apps be fun to use and business apps are so boring and complicated,” says Vijayan.
He later retained that mindset when he began creating software platforms. He left Oracle in 2007 and joined VMware right around the time of their IPO, learning a lot about what creating a hyper growth business by developing and delivering the technology and platform for VMware as a public company.
Tesla then reached out to Vijayan because they were looking for a leader to run all of their internal applications in 2010, when Tesla was trying to go public through an IPO. He was excited about the opportunity but didn't end up joining because it was not the deal he wanted and politely declined. “Luckily, I was contacted again after a year by Tesla, and met Elon [Elon Musk], again for the second time and had a great discussion. I was even more excited about all the progress made and then there was also a very clear meaning he articulated as to why he needs a technology leader. And the role was quite exciting,” says Vijayan.
The role Musk was describing was much bigger than a typical CIO role. He wanted Vijayan to develop a tech platform for Tesla that would connect every part of their business with a closed feedback loop to their customers through their retail stores and ecommerce website. It also included some versions of the vehicle security and connectivity as well. Like much of what Musk does, he wanted to reinvent the car manufacturing process from start to finish, including the software.
“Then I connected the dots. Just before joining Tesla, I ended up buying a BMW. I went through this process with my wife. We did research to go buy a car and I went through this process and found it such a gruelling experience. Even though we knew exactly what we wanted to buy, it took almost eight hours at a physical dealership. And it was very painful,” says Vijayan. He felt his experience as a software engineer could change that for the better.
He decided to leave Tesla and go back to his original seed idea when he was at Oracle to start a cloud SaaS company and solve this problem for the automotive industry. He did his research, talking to executives in the big brand manufacturing companies, as well as retailers and dealers, across different brands in the country, about the type of problems they faced.
“And then after that, I was quite convinced, because everything came out as absolutely a big problem—massive fragmentation, doesn't get modern consumers. And the underlying reasons were the same thing, there is no good tech platform, no good tech solution in the industry. So that validated everything and we started the company with my personal money.Then, there were a few early investors, friends or family, investors who were ready to invest right away and saying that some people have seen what I did at Tesla, they said, ‘Okay, we are ready to write a check, Jay, whatever you're planning to do’,” says Vijayan.
Today Tekion is winning over the major players in the automotive industry. Its nearly 3,000 employees support systems for large dealers and manufacturers alike. The fast-growing company more than doubled its customer base and annual recurring revenue from 2021 to 2022, according to Vijayan, who recently announced new additions to its executive team, perhaps preparing the company for a future IPO.
The company’s market opportunity coupled with Vijayan’s tech pedigree allowed Tekion to attract $435 million in venture funding to date, starting with its Seed Round for $3.1 million with Storm Ventures in 2016. It’s A round for $10 million in 2017 was led by Index Ventures, who also participated in each of Tekion’s rounds. It’s latest D round raised $250 million in October 2021 was led by Alkeon Capital and Durable Capital Partners. Other investors include BMW iVentures, Advent International, Hyundai Motors, Holman Growth Ventures, Airbus Ventures, General Motors, Renault Nissan Mitsubishi, Exor and others.
Vijayan grew up in Chennai, India. His dad was a small-scale businessman and politician. His mother a homemaker. “My passion for computers was when I finished my bachelor's going to my masters. My dad started a business at that time. It was a big thing where we had to take a loan from the bank, giving our house document as the collateral for to the bank,” says Vijayan. That’s where he started his fascination with computer programming. But they had challenges scaling the business and had to sell the business and pay off the loan.
To pay back the loan, Vijayan left India for higher paying jobs, first in Oman, then Singapore, when a recruiter reached out to him for a position at Oracle at its headquarters in Redwood Shores, California and he began his career as a programmer in 1999. He then moved to VMware in 2007, followed by 4 years at Tesla before leaving to launch Tekion in 2016.
As for the future? “My goal is by 2027 or earlier to become the number one platform in the space for automotive retail. That's the goal. And that's what we're working towards,” concludes Vijayan.
