Fair will acquire all of Canvas' assets and nearly 100 of its employees. All of the service's existing subscribers will have an opportunity to join Fair. "We just became a much bigger, more dominant platform," Fair CEO Scott Painter told CNBC. "This is really a reflection of the scale of where we're operating."

The two-year startup specializes in helping entry-level drivers who may not qualify for traditional auto loans. Prospective car owners select a vehicle on the Fair app. They can then pay a monthly payment for the car, insurance and maintenance without committing to a long-term lease. The startup partnered with Uber back in May to launch a program that allows those who don't own cars to become drivers for the ride-hailing service. Eligible Uber drivers pay a weekly fee of $185 in order to access a pre-owned car through Fair with no credit requirement.

Fair has accumulated 45,000 subscribers so far and has launched in 30 different cities. Painter said that the company plans on expanding both nationally and internationally before going public.