Painter’s brother, Tyler Painter, resigned as Fair’s chief financial officer last week.
Contrary to earlier reports that Fair had made the cuts of its own volition, the Verge reports that Softbank pushed Fair’s management to trim operating costs during a number of meetings over the last month.
While Painter has lost his executive post, he says he will stay on as chairman of Fair’s board.
“I am not leaving the company at all,” Painter told the Verge. “Different skill sets are needed during different phases of a company’s growth. Right now, Adam and our new additions to the leadership team will confirm our commitment to being a profitable business.”
Painter is the brash serial entrepreneur who founded TrueCar in 2005. He drove the company’s early growth by exploiting car shoppers’ suspicions about used-car dealers with the slogan “know your true price.” The tactic ultimately backfired as thousands of dealers dropped their TrueCar subscriptions, forcing a chastened Painter to leave TrueCar in 2015.
He then co-founded Fair, a vehicle-subscription firm, in 2016 with Georg Bauer of BMW, Mercedes-Benz and Tesla, and Fedor Artiles of Mercedes-Benz, Chrysler, Volkswagen and Tesla.
The company has raised $2.1 billion in financing, $500 million in equity and the rest in debt, according to Crunchbase. Softbank led a $385 million round of debt financing in Dec. 2018 and, this past Sept., took part in a $500 million debt financing round along with fellow Japanese investor Mizuho Bank.
Fair was on a growth path and just this past September acquired car-leasing firm Canvas from Ford. Financial details were not disclosed, although Ford was said to get a stake in the company.
However, Fair has yet to turn a profit, the company admits. While that may be typical of many high-growth tech startups, Softbank is apparently losing patience with some of its investments. Last month, Softbank CEO and founder Masayoshi Son was reported as saying he is “embarrassed” by his track record following big bets on loss-making businesses like Uber and WeWork.
At the time of the Canvas purchase, Fair claimed it had 45,000 subscribers in the U.S., with 3.2 million downloads across 30 markets. But the numbers are murky. Over the summer, Fair told the AIM Group that it was live in 35 cities, although a check turned up zero vehicle inventory in 14 of those cities. Perhaps not surprisingly, the Verge reported that three anonymous former and current employees told them that Fair inflated its market numbers.
Last week, the company announced it would lay off 40% of Fair’s 700-person staff. Painter explained to TechCrunch: “I’ve decided to focus the company’s resources on strengthening Fair’s core technology and reducing costs associated with the capital-intensive supply side of our business. … As part of the process of achieving profitability, we’re reducing our headcount across the business.”