In the second edition of our Raise Less, Own More series, Upper90 CEO and Co-Founder Bill Libby talked to Nigel Tunnacliffe of Coastline Academy.
Coastline is on a mission to eradicate car crashes by helping people become safe, confident drivers for life. They believe individuals learning to drive deserve the best education experience in the world. Whether it's your first time behind the wheel or you need a brush up before your test, they offer a driving experience that will make you a safer and more confident driver. Through state-certified driving instructors, late-model cars equipped with the latest safety equipment and online scheduling and booking, they provide world-class convenience and education.
Since launching in 2018, the company has become the largest driving school in the country by leveraging technology and acquisitions.
Subscribe to our newsletter on LinkedIn to receive these interviews straight to your inbox so you don’t miss an episode!
Founded: 2017
Based: Sacramento, CA and Remote
Upper90 Lead: Billy Libby and Drew Pelletier
Deal Background: Coastline is a California-based startup that is disrupting student driver education and training that was originally sourced by Bebe Chueh, an Upper90 Venture Partner. Founder Nigel Tunnacliffe saw an opportunity to digitize highly-fragmented, government-mandated drivers education programs which are generally run locally by “mom and pop” operators. Upper90 provided the Company’s first institutional credit facility to help play a pivotal role in the scaling of its business.
Starting Point: Coastline signed up a delayed draw asset-backed loan facility from Upper90 to finance the purchase of fleet vehicles used for driver education classes. Upper90 also made a small equity investment at the Company’s pre-seed stage.
Partnership Evolution: Upper90 increased its equity investment 3x at the same initial pre-seed valuation for further potential upside alignment and helped the Company develop strategies to increase driving instructor utilization and build a model to acquire adjacent family-owned and independently operated driving schools whose licenses were geographically diversified. Upper90 not only helped Coastline professionalize its finance and accounting functions, but introduced the company to other investors.
Founder Q&A
How did you first hear about and connect with Upper90?
We met Upper90 venture partner Bebe Chueh through the YC network
Why Upper90?
Upper90 was the type of partner we were looking for, but didn’t know existed. The combination of debt and equity was just what we needed at the time, and we were hugely impressed with their conviction to introduce a large scalable credit facility at a time when we were still at a very early stage.
What was the problem you were trying to solve at the time?
We needed to rapidly expand our fleet of vehicles, while also investing in our operations and tech platform. Our only other options at the time were equity and equity-like debt structures, which we were looking to minimize.
What’s the nature of your relationship with Upper90 today?
Upper90 is one of our largest equity investors, and being part of the Upper90 network continues to provide value for us.
What’s the biggest misconception about taking debt vs equity as a founder?
There are many ways that debt can be structured - it’s not just venture debt and term loans. Including debt in the earliest stages can enable a much more efficient capital structure even if raising large amounts of VC investment is the goal. When the company does well, the cost of capital on the debt will be radically lower than any equity investment.
What would you want other entrepreneurs and founders to know about working with Upper90?
Upper90 isn’t just for fintech. They found a way to creatively structure a credit facility for our fleet that left much more cash on our balance sheet than leasing or term loans, and enabled us to scale in a very capital efficient way.
NOTICE TO RECIPIENTS
Examples were chosen based on objective, non-performance based criteria for the purpose of describing the investment processes and analyses the Firm uses to evaluate such investments. [FIRM] makes no assurance that investment opportunities similar to that described in the investment example will be available in the future. It should not be assumed that the investment example provided was profitable or will be profitable going forward, or that a Fund’s future investments will have similar traits to the example presented.
THIS DOCUMENT IS FOR INFORMATIONAL PURPOSES ONLY AND SHOULD NOT BE RELIED UPON AS INVESTMENT ADVICE. This document has been prepared by FIRM and is not intended to be (and may not be relied on in any manner as) legal, tax, investment, accounting or other advice or as an offer to sell or a solicitation of an offer to buy any securities of any investment product or any investment advisory service. The information contained in this document is superseded by, and is qualified in its entirety by, such offering materials. This document may contain proprietary, trade-secret, confidential and commercially sensitive information. U.S. federal securities laws prohibit you and your organization from trading in any public security or making investment decisions about any public security on the basis of information included in these materials.
THIS DOCUMENT IS NOT A RECOMMENDATION FOR ANY SECURITY OR INVESTMENT. References to any portfolio investment are intended to illustrate the application of FIRM’s investment process only and should not be used as the basis for making any decision about purchasing, holding or selling any securities. Nothing herein should be interpreted or used in any manner as investment advice. The information provided about these portfolio investments is intended to be illustrative and it is not intended to be used as an indication of the current or future performance of FIRM’s portfolio investments.
An investment in a Fund entails a high degree of risk, including the risk of loss. There is no assurance that a Fund’s investment objective will be achieved or that investors will receive a return on their capital. Investors must read and understand all the risks described in a Fund’s final confidential private placement memorandum and/or the related subscription documents before making a commitment. The recipient also must consult its own legal, accounting and tax advisors as to the legal, business, tax and related matters concerning the information contained in this document to make an independent determination and consequences of a potential investment in a Fund, including US federal, state, local and non-US tax consequences.
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS OR A GUARANTEE OF FUTURE RETURNS. The performance of any portfolio investments discussed in this document is not necessarily indicative of future performance, and you should not assume that investments in the future will be profitable or will equal the performance of past portfolio investments. Investors should consider the content of this document in conjunction with investment fund quarterly reports, financial statements and other disclosures regarding the valuations and performance of the specific investments discussed herein. Unless otherwise noted, performance is unaudited.
DO NOT RELY ON ANY OPINIONS, PREDICTIONS, PROJECTIONS OR FORWARD-LOOKING STATEMENTS CONTAINED HEREIN. Certain information contained in this document constitutes “forward-looking statements” that are inherently unreliable and actual events or results may differ materially from those reflected or contemplated herein. FIRM does not make any assurance as to the accuracy of those predictions or forward-looking statements. FIRM expressly disclaims any obligation or undertaking to update or revise any such forward-looking statements. The views and opinions expressed herein are those of FIRM as of the date hereof and are subject to change based on prevailing market and economic conditions and will not be updated or supplemented.
EXTERNAL SOURCES. Certain information contained herein has been obtained from third-party sources. Although FIRM believes the information from such sources to be reliable, FIRM makes no representation as to its accuracy or completeness.
THIS DOCUMENT IS NOT INTENDED FOR GENERAL DISTRIBUTION AND IT MAY NOT BE COPIED, QUOTED OR REFERENCED WITHOUT FIRM’S PRIOR WRITTEN CONSENT.
