Merchant Innovation

Vroom Raises $50 Million To Disrupt Used Auto Sales

Vroom wants to disrupt the used car market and has raised $50 million in a Series E round of funding to do just that, according to TechCrunch.

That brings Vroom’s total capital raised to $218 million.

Vroom started in 2013 as an easy way for consumers to buy or sell used cars online or through mobile, but the company’s ambition appears to have grown considerably since then. The used car market in the U.S. is a $400 billion market annually. In 2015, auto retailers sold 38.3 million used cars at an average price of $18,500, according to Edmunds.com Used Vehicle Market Report.

“At the highest level, we assemble great inventory for customers, give them a great shopping experience via mobile or desktop … and simplify the buying process so they can pull the trigger without haggling and paperwork. The car is delivered to your front door,” Paul Hennessy, Vroom’s new CEO, told TechCrunch.

Hennessy came to Vroom in June after a stint as the CEO of Priceline.com.

When a customer buys a car off Vroom, they get seven days to test drive the vehicle after delivery while they still have the option to return it.

Customers using Vroom’s seller option can take photos of their vehicles, then enter their VIN numbers through an app and get a quote on the value of their vehicles.

Vroom uses an algorithm to gauge the value of vehicles based on their condition, but the company also runs an auto repair and refurbishing center in Texas that it uses before it sells many of its vehicles.

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