By on December 16, 2020

Vroom

Vroom, an emerging e-commerce player in buying and selling used cars,  has announced the acquisition of CarStory, itself another used car platform. CarStory’s AI-powered analytics and digital services are what attracted Vroom, through the purchase of Vast Holdings, Inc., CarStory’s parent company.

With more than 7 million listings a day and 18 million consumer views per month, CarStory adds what Vroom says is the most complete and accurate view of predictive market data to their own national e-commerce and vehicle operations platform. CarStory will carry on with driving retail innovation by aggregating, optimizing, and distributing market data from a myriad of automotive sources, and offering its digital retailing services to dealers, financial services companies, and automotive industry research and retailing firms as a part of Vroom.

“We’ve built a platform made for scale and driven by data. As car buyers and sellers across the country increasingly turn to ecommerce solutions, CarStory will strengthen and extend the reach of our digital retailing platform, and together we will accelerate the transformation of the massive used auto industry,” said Paul Hennessy, Chief Executive Officer at Vroom. “We’ve been continually impressed by the size, breadth and sophistication of CarStory’s operations as we have worked with them for the past two years.”

“Our mission has always been to provide data and services that enable our partners to grow and that won’t change,” said John Price, Chief Executive Officer of CarStory. “We believe joining the Vroom team significantly enhances our ability to transition an industry to digital retailing and will allow our partners to reach their goals even faster.”

Vroom announced it will pay an aggregate purchase price of approximately $120 million, comprised of approximately 60 percent in cash and 40 percent in shares of Vroom common stock. The final cash/stock split is subject to adjustment and will be determined at closing. The transaction is anticipated to close in January 2021. The acquisition of CarStory is expected to be neutral to Vroom’s operating results in 2021.

Is the purchase of CarStory a sign of more contenders in the used car market heading towards consolidation? The plethora of sellers in a crowded field suggests this may be the start of more integrations, as there are no title contenders that have emerged yet. The used car market in the US was estimated at $750 billion in 2019, and the top 10 used vehicle retailers contributed to less than 10 percent of used car sales. CarMax is the market leader with less than 2 percent market share, followed by the Penske Automotive Group.

[Image: Vroom]

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6 Comments on “CarStory a Good Buy for Vroom?...”


  • avatar
    Kyree S. Williams

    I’m currently in the process of offloading a car (a 2016 535i xDrive M Sport) to Vroom. I’ll report back when it’s all over.

    • 0 avatar
      indi500fan

      Interesting. I’ve never done one of these. My quote from webuyanycar.com was so laughably low I don’t know how they transact any business outside of perhaps money laundering deals.

    • 0 avatar
      FerrariLaFerrariFace

      I got initial offers from both Carvana and Vroom for my truck. Both good offers, but Carvana’s offer was higher.

    • 0 avatar
      Land Ark

      I sold the 2019 IS300 I was leasing to Vroom last month.

      It wound up going perfectly fine but the whole time I felt like it was going to unravel. But, they paid me very nearly what I would have accepted on the open market which was over $2,000 more than the next highest offer (Carvana) and more than $4,000 more than the Lexus dealer I leased it from.

      With them not paying me until the car arrived in Florida made me really uncomfortable because if they decided to try to screw me by saying it wasn’t as good as the totally vague and subjective rating of “pretty great” I gave its condition, I’d have had to pay to have it shipped back to me and also for the cost of shipping it to them or accept whatever value they decided to give it.

      But, within 24 hours of it arriving at their lot they had sent the payment to Lexus Financial and the remaining balance check to me – exactly what we agreed to to the penny.

      My wife wanted to know what her 35k mile 2006 Z4 3.0si would get as an offer from them. Turns out they went from being the highest offer for the Lexus to only offering scrap value for hers ($1,200??).

      I guess if you have a car less than 3 or 5 years old, check them out. But be prepared for a large amount of worry until the check arrives.

      Here’s my car:
      https://www.vroom.com/inventory/lexus-is-300-2019-JTHC81D29K5035969

  • avatar
    Scalewoodman

    This IS a big deal and trend- enhanced by COVID in 2020. Used cars are HOT right now and touchless shopping is the future of the younger generation. The efficiency and ‘system’ of a national franchise driven by customer data is the future. Again, trust and consistency (repeat buyers) driven by a ‘system’ applied to many locales develops brand identity. Amazon and WalMart are rumored to be ‘disrupting’ as they sniff around automotive retailing. These are exciting times for consumers. Tesla and Rivian for two new car sellers are shunning traditional dealer distribution– why not these guys with used? Despite the deep pockets, many of these national retailers have yet to churn a profit but the $ investment shows a huge commitment.

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