Auto Industry Woes? Not For Everyone: Zag Raised $32.4 Million

Santa Monica, California based Zag, an auto-buying service that lets people buy cars at a discount through affinity organizations like AAA, has raised a monster round of financing – $32.4 million. The round was led by USAA, a financial organization for U.S. military personnel with 6.4 million members. Existing investors Anthem Venture Partners, GRP Partners and the Skoll Fund co-invested in the funding round.

USAA has been an affinity partner of Zag’s since 2007 – 22,000 USAA members have purchased cars through the Zag service, the company says, saving them $115 million v. MSRP.

Zag was founded by Scott Painter, a long time auto-industry guy. Painter also founded True Car, which launched at TechCrunch50 in 2008.