Online pre-owned car retailer, Vroom, announced on Monday it has raised $54 million during a Series B funding round, bringing its total equity funding to date to $73 million.
The investors in the round are Catterton (investors in major consumer retail brands such as Restoration Hardware and P.F. Chang’s); General Catalyst Partners (investors in Snapchat, Warby Parker and Kayak); and funds and accounts managed by T. Rowe Price Associates, Inc. (investors in Redfin and Workday). Jeffery Boyd, Chairman and former CEO of The Priceline Group, and Bob Mylod, former CFO of The Priceline Group, also participated in the round.
Notably, Vroom is seeking to turn buying and selling cars into an enjoyable process, instead of a chore, by combining technology with deep automotive industry acumen.The company currently enables customers to easily find impeccably refurbished, pre-owned cars at no-haggle prices below market value, with free delivery to their doorsteps.
“We make it much easier for consumers to find the right car at below market prices by removing fixed costs. We take great pride in the quality of our reconditioning and we specialize in low-mileage, recent year models with impeccable vehicle history reports.”
Vroom also provides a 7-day money back guarantee, no questions asked return policy, and a 90-day bumper-to-bumper warranty, coupled with free shipping nationwide. Michael Farello, Senior Partner at Catterton, shared:
“What attracted us to Vroom is the opportunity to transform a large industry that has been challenged to deliver great customer service. Vroom is taking a hassle-free and transparent approach to car retailing, and the proposition is resonating with consumers.”
Founded less than two years ago in 2013, Vroom is already the largest online car store in the U.S. With nearly $20 million in sales in the month of May alone, the company is on track to reach $300 million in sales in 2015.
Managing Director at General Catalyst, Adam Valkin, explained:
“Most of the over $500 billion worth of used cars sold each year are advertised online, but very few involve end-to-end online transactions. Customers are demanding this more and more, and Vroom is the emerging leader in this massive market.”
Bob Mylod, former CFO of The Priceline Group, added:
“We see parallels to the travel and real estate industries in Vroom’s model, particularly with its focus on consumer trust. I’m looking forward to joining the Vroom board and helping the company continue to grow as the market leader in the online automotive space.”
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