citybiz+ CariD Poised for Revival after Bankruptcy of Parent Firm ID Auto

Chicago-based Fifth Star’s acquisition of a majority stake in CARiD for $35 million has raised the prospects of the Cranbury, N.J., seller of car parts and accessories, weeks after its parent firm emerged from bankruptcy.

“This funding positions CARiD to accelerate our growth, innovate further, and continue improving the way people shop for car parts and accessories,” said Lev Peker, CEO of ID Auto, CariD’s parent company.

“This strategic positioning, combined with the clear upward trajectory of the auto parts market, solidifies our confidence in CARiD’s capacity for remarkable growth and innovation,” he added.

ID Auto is emerging from Chapter 11 bankruptcy after its plan was approved by a Delaware court in late February. It had gone public in 2020 through a so-called “de-SPAC transaction,” and filed for bankruptcy protection in December 2023, reporting assets of $18.7 million in assets and $55 million in liabilities.

The bankruptcy plan involved a unique “straddle” concept where voting commenced prior to the filing and finished after, Fifth Star’s law firm Sidley said. The unique structure allowed confirmation of the plan within 47 days.

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Fifth Star, an operator of consumer and consumer-adjacent technology businesses, acquired CARiD’s parent firm ID Auto as part of the bankruptcy reorganization plan. It provided an undisclosed amount in debt financing as the plan’s sponsor and has made a “meaningful cash infusion” to satisfy the company’s obligations to its customers and partners and fuel growth, the N.J. company said.

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Founded in 2008 by Steven Royzenshteyn and Roman Gerashenko, CARiD and ID Auto run a digital platform for automotive parts, accessories and repairs. Royzenshteyn ran the company until July 2020. He also runs Onyx, an e-commerce company.

CARiD said it would use the funds for product expansion, technological advancements and customer service upgrade. It also talked up its prospects, saying the age of the average car on U.S. roads hitting an all-time high of 12.5 years offers new opportunities.