Vroom, Inc.

Last updated
Vroom, Inc.
Company type Public
Nasdaq:  VRM
IndustryAuto Finance/Automotive AI Analytics
FoundedAugust 2013;11 years ago (2013-08)
Headquarters Houston, Texas, US
Key people
Thomas Shortt (CEO)
ProductsUsed Cars
RevenueIncrease2.svg US$2.6 billion (2021) [1]
Number of employees
5 employees (February 1, 2024) [2]
Website vroom.com

Vroom, Inc. is a parent company of United Auto Credit Corporation (UACC) and CarStory. Previously, it was a used car retailer and e-commerce company that let consumers buy, sell, and finance cars online. [3] Vroom ceased e-commerce automotive sales operations on January 22, 2024. [4] [5]

Contents

History

The company was founded in August 2013 by Kevin Westfall and Marshall Chesrown as AutoAmerica. In November 2014, Elie Wurtman and Allon Bloch joined as co-founders to transform the company into a technological platform and the company was renamed Vroom. It also has a refurbishment facility in Stafford, Texas [6] and was included on Forbes’ list of the Hottest E-Commerce Startups of 2015. [7] Vroom's current CEO is Tom Shortt. He succeeded Paul Hennessy, who was previously the CEO of Priceline.com. [6]

In December 2015, the company acquired Texas Direct Auto, a Stafford-based company founded in 2002 that is now owned by Vroom but operated as a separate brand. [8] The combined company was profitable and reached $900 million in revenue in 2015. [9] In February 2018, Vroom closed operations in its Whitestown, Indiana, facility and laid off approximately 25% of its staff in the New York City and Stafford, Texas locations. [10] In December 2018, Vroom closed a Series G financing round of $146 million led by AutoNation and began scaling its operations again. [11]

On January 22, 2024, Vroom announced "that it is discontinuing its e-commerce operations and winding down its used vehicle dealership business in order to preserve liquidity and enable the Company to maximize stakeholder value through its remaining businesses." Vroom owns and operates United Auto Credit Corporation (UACC), a leading automotive finance company, and CarStory, a leader in AI-powered analytics and digital services for automotive retail. UACC and CarStory will continue to serve their third-party customers and focus on growing those businesses"[ citation needed ] [12]

Products

Rather than functioning as a peer-to-peer marketplace, Vroom was an e-commerce service that handled the entire transaction with no-haggle pricing. [13] [14] The company offered financing from more than 12 banks and delivered cars to customers nationwide. [15] [16] All cars that Vroom sold were reconditioned and the company used proprietary RFID tracking and prioritization software to automate the refurbishment process. [17] [18] Vroom provided a seven-day money back guarantee on purchases and a 90-day bumper-to-bumper warranty. [13] Vroom also bought cars from customers, who could receive a cash voucher after submitting photos and information about the car online. [15]

Funding

Vroom raised $440 million in total funding. Investors include AutoNation, L Catterton, General Catalyst Partners, Allen & Company, T. Rowe Price, John Elway, Steve Berrard (former CEO of Blockbuster and AutoNation), Cascade Investments (the investment holding company of Microsoft founder Bill Gates), Jeffery Boyd (chairman of The Priceline Group), Bob Mylod (former CFO of The Priceline Group), PICO Venture Partners, Elie Wurtman, Allon Bloch, and Dan Gilbert (Owner of Cleveland Cavaliers & Quicken Loans). [13]

On January 22, 2024, Vroom announced that they were ultimately were unable to raise the necessary capital in the current market to fund their automotive retail operations. [5] This lack of funding caused the company to shutter its automotive retail operations and lay off 800 employees. [4]

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References

  1. ↑ "Vroom, Inc. Annual Report (Form 10-K)". U.S. Securities and Exchange Commission. 31 March 2022.
  2. ↑ "Vroom, Inc. company profile". LinkedIn. 12 November 2023.
  3. ↑ Griffith, Erin (16 June 2015). "A used car site backed by John Elway is on track to do $300 million in sales this year" . Retrieved 19 February 2016.
  4. 1 2 "Vroom Shares Tumble 33% After Laying Off 800, Winding Down Ecommerce Business". MarketWatch. Retrieved 2024-01-22.
  5. 1 2 "Vroom Announces Wind-Down of Ecommerce Used Vehicle Operations". www.businesswire.com. 2024-01-22. Retrieved 2024-01-23.
  6. 1 2 Taylor, Kate (16 June 2015). "Vroom, the Startup That Aims to Be the Zappos of Online Car Buying, Raises $54 Million". Entrepreneur. Retrieved 19 February 2016.
  7. ↑ Mac, Ryan (30 December 2015). "The Hottest E-commerce Startups Of 2015". Forbes. Retrieved 19 February 2016.
  8. ↑ Kolodny, Lora (16 December 2015). "Vroom Raising $95 Million to Acquire Texas Direct Auto". Wall Street Journal. Retrieved 19 February 2016.
  9. ↑ Mac, Ryan (17 December 2015). "Online Car Startup Vroom Looks To Acquire Leading EBay Car Retailer And Raise $95 Million". Forbes. Retrieved 19 February 2016.
  10. ↑ "Vroom hits brakes on ambitious plans for central Indiana". 6 March 2018.
  11. ↑ "Vroom nabs $146M from AutoNation, VCs for its used car site". TechCrunch. 11 December 2018. Retrieved 2019-01-27.
  12. ↑ "Vroom Announces Wind-Down of Ecommerce Used Vehicle Operations". ir.vroom.com.
  13. 1 2 3 Korosec, Kristen (16 December 2015). "Online Car Startup Vroom Raises $95 Million And Buys A Competitor". Fortune. Retrieved 19 February 2016.
  14. ↑ Kessler, Sarah (20 July 2015). "The Used Car Market Meets 2015: No Showroom, No Salesmen, Free Delivery". Fast Company. Retrieved 19 February 2016.
  15. 1 2 Griffith, Erin (16 June 2015). "A used car site backed by John Elway is on track to do $300 million in sales this year". Fortune. Retrieved 19 February 2016.
  16. ↑ Taylor, Kate (20 July 2015). "Vroom, the Startup That Aims to Be the Zappos of Online Car Buying, Raises $54 Million". Entrepreneur. Retrieved 19 February 2016.
  17. ↑ Ha, Anthony (16 December 2015). "Vroom Raises $95M And Acquires Texas Direct Auto In Its Quest To Bring Car-Buying Online". Techcrunch. Retrieved 19 February 2016.
  18. ↑ Taves, Max (20 July 2015). "Vroom raises $54 million to make buying a used car less horrible". CNET. Retrieved 19 February 2016.
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