CarStory a Good Buy for Vroom?

by Jason R. Sakurai

Published: December 16th, 2020

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]

#AutomotiveMarketing #CarStory #Resale #UsedCars #Vroom

Jason R. Sakurai

With a father who owned a dealership, I literally grew up in the business. After college, I worked for GM, Nissan and Mazda, writing articles for automotive enthusiast magazines as a side gig. I discovered you could make a living selling ad space at Four Wheeler magazine, before I moved on to selling TV for the National Hot Rod Association. After that, I started Roadhouse, a marketing, advertising and PR firm dedicated to the automotive, outdoor/apparel, and entertainment industries. Through the years, I continued writing, shooting, and editing. It keep things interesting.

More by Jason R. Sakurai

Comments

Join the conversation

6 comments

Kyree on Dec 16, 2020

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.

Like Reply
- See 2 previous
- Indi500fan on Dec 16, 2020
  
  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.
  
  Like
- FerrariLaFerrariFace on Dec 16, 2020
  
  I got initial offers from both Carvana and Vroom for my truck. Both good offers, but Carvana's offer was higher.
  
  Like
- Land Ark on Dec 16, 2020
  
  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
  
  Like
Scalewoodman on Dec 18, 2020

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.

Like Reply
- 28-Cars-Later on Dec 18, 2020
  
  I truly hope you're wrong and the Zoomers have a brain. If masks and gloves aren't good enough, why are we using them?
  
  Like

Recent Comments

Jeff JMII--If I did not get my Maverick my next choice was a Santa Cruz. They are different but then they are both compact pickups the only real compact pickups on the market. I am glad to hear that the Santa Cruz will have knobs and buttons on it for 2025 it would be good if they offered a hybrid as well. When I looked at both trucks it was less about brand loyalty and more about price, size, and features. I have owned 2 gm made trucks in the past and liked both but gm does not make a true compact truck and neither does Ram, Toyota, or Nissan. The Maverick was the only Ford product that I wanted. If I wanted a larger truck I would have kept either my 99 S-10 extended cab with a 2.2 I-4 5 speed or my 08 Isuzu I-370 4 x 4 with the 3.7 I-5, tow package, heated leather seats, and other niceties and it road like a luxury vehicle. I believe the demand is there for other manufacturers to make compact pickups. The proposed hybrid Toyota Stout would be a great truck. Subaru has experience making small trucks and they could make a very competitive compact truck and Subaru has a great all wheel drive system. Chevy has a great compact pickup offered in South America called the Montana which gm could make in North America and offered in the US and Canada. Ram has a great little compact truck offered in South America as well. Compact trucks are a great vehicle for those who want an open bed for hauling but what a smaller more affordable efficient practical vehicle.
Groza George I don’t care about GM’s anything. They have not had anything of interest or of reasonable quality in a generation and now solely stay on business to provide UAW retirement while they slowly move production to Mexico.
Arthur Dailey We have a lease coming due in October and no intention of buying the vehicle when the lease is up.Trying to decide on a replacement vehicle our preferences are the Maverick, Subaru Forester and Mazda CX-5 or CX-30.Unfortunately both the Maverick and Subaru are thin on the ground. Would prefer a Maverick with the hybrid, but the wife has 2 'must haves' those being heated seats and blind spot monitoring. That requires a factory order on the Maverick bringing Canadian price in the mid $40k range, and a delivery time of TBD. For the Subaru it looks like we would have to go up 2 trim levels to get those and that also puts it into the mid $40k range.Therefore are contemplating take another 2 or 3 year lease. Hoping that vehicle supply and prices stabilize and purchasing a hybrid or electric when that lease expires. By then we will both be retired, so that vehicle could be a 'forever car'. And an increased 'carbon tax' just kicked in this week in most of Canada. Prices are currently $1.72 per litre. Which according to my rough calculations is approximately $5.00 per gallon in US currency.Any recommendations would be welcomed.
Eric Wait! They're moving? Mexico??!!
GrumpyOldMan All modern road vehicles have tachometers in RPM X 1000. I've often wondered if that is a nanny-state regulation to prevent drivers from confusing it with the speedometer. If so, the Ford retro gauges would appear to be illegal.