On the way to become the top seller of used vehicles online, Vroom Inc. has actually raised $50 million in a Series E round of equity funding, bringing its overall capital raised to $218 million.
The market for used cars in the U.S. alone exceeds $400 billion each year. There were 38.3 million used cars sold in 2015, with the average price of $18,500 each.
When Vroom started up in 2013, it was initially billed as a stress-free way to purchase or sell previously owned automobile online and by means of mobile.
Vroom’s present CEO Paul Hennessy, who signed up with the company in June this year and was previously the CEO of Priceline.com, drew parallels between online travel agencies and Vroom.
Both markets are extremely fragmented and filled with competitors online and off. E-commerce platforms like Vroom could put some brick and mortar car dealers out of business, he noted.
“At the highest level, we put fantastic stock for customers, provide an excellent shopping experience through mobile or desktop … and simplify the buying procedure so they can pull the trigger without bargaining and documentation. The car is provided to your front door,” Hennessy stated.
Purchasers get seven days to test drive an automobile after it’s provided. Hennessy said he desires car shopping to be as simple as purchasing (or returning) a couple of shoes online.
On the seller-side, individuals can upload images of their automobile along with a VIN number by means of smart device app to obtain a quote from Vroom, and quickly get their automobiles sold.
Vroom utilizes proprietary algorithms and information about the worth of different automobiles and trucks in different conditions to set costs. Vroom likewise runs a big fixings and reconditioning operation, Texas Direct Auto, which it obtained in 2015.
Vroom’s income today comes from sales of pre-owned vehicles to both individual consumers and rental vehicle business. It likewise offers scrap, after market parts from cars that can’t be completely repaired. And it generates revenue from offering warranties and organizing car loans.
