Vroom, the New York-based online pre-owned car retailer, announced today it raised a $50 million Series E funding round. Altimeter Capital and Foxhaven Asset Management joined existing investors L. Catterton, General Catalyst Partners, Allen & Company, and funds and accounts advised by T. Rowe Price Associates, Inc.
Vroom has seen rapid growth in the three years since its founding and raised $218 million in funding to date. The news of this latest round comes just a couple of months after the company announced a new CEO, Paul J. Hennessy, who was previously chief executive at Priceline.com.
“For a company that is only three years old, we are just beginning to roll out our product innovations that will soon include 100% digital paperwork and auto financing enhancements.,” Hennessy said in a statement. “The continued support of our incredible board led by Chairman Bob Mylod, the vote of confidence from our existing investors and the addition of two new world-class investors to our capital base gives us the firepower we need to achieve our goal of becoming the largest pre-owned car retailer in the nation.”
Vroom is trying to make the used-car buying and selling processes as simple as possible for all parties while cutting out a hated middleman — the used-car salesperson.
For sellers, the process is as simple as scanning their car’s VIN number and submitting some photos to Vroom. If the service accepts the vehicle, based on this information, the user will receive an instant cash voucher.
Car buyers, meanwhile, can search for cars online from the comfort of their couches, secure in the knowledge that a pushy used-car dealer is nowhere nearby. When they choose the car they want, it's delivered to them free of charge, with a seven-day money back guarantee.
Vroom expects it will generate over $1 billion in revenue in 2016, and plans on using the new funding to expand its operations in the United States and increase inventory. As of this morning, Vroom had 2,625 vehicles listed on their site.
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