Shift Technologies Parks $50M For Online Car Marketplace

Shift Technologies, a California-based startup focused on buying and selling cars over the Web, said on Tuesday (Sept. 1) that it has raised $50 million in funding.

The company said that its latest investment round came from a consortium of investors, with leadership from Goldman Sachs Investment Partners. Though Forbes noted that there was no valuation range disclosed, the company has raised $75 million since beginning operations two years ago. In addition to the investment, which also featured existing investors, including Highland Capital and DFJ Venture, Goldman took a seat on the company’s board.

The financial publication noted that the online auto marketplace is becoming a crowded one. Just three months ago, competitor Beepi was said to be in a round of funding of up to $300 million, and a New York peer, Vroom, grabbed a $54 million debt and equity investment in June.

Forbes said there are some slight differences among the business models, with Shift Tech’s competitors taking both possession and title of the vehicles before selling them to consumers. And the key to online buying is the pricing rather than the ability to test a would-be purchase by driving it (which, in these cases, cannot be done).

In contrast, Shift inspects and then tunes up the vehicles before taking them on and listing them for sale. There’s a base minimum in place for the seller, with anything above that being split between Shift and the seller. The company told Forbes it makes, on average, $1,500 more than would be seen on a dealer trade-in. Shift, unlike its peers, also offers test drives, with “car enthusiasts” who bring the vehicles out to would-be buyers within 45 minutes.

The company has said that its total addressable market is the $750 billion annual sales garnered by the used auto market, and of that amount, $250 billion comes through private deals.

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