It looks like VROOM will be filing for an IPO in the near future. It’s estimated they will have a valuation of $1.93 Billion while aiming to raise $300 Million in the IPO. Most automotive retailers have recently been cutting into profit margins by slashing prices to lower inventory counts. Carvana Co. [CVNA] (www.carvana.com) is up by +13.59% and taking advantage of being a technology based automotive retailer during the COVID-19 stay at home orders.
Is VROOM a technology based retailer? (www.vroom.com) VROOM purchased hugely successful Texas Direct Auto (www.texasdirectauto.com) in 2015 after Texas Direct Auto utilized eBay Motors & streamlined merchandising processes to become a top independent dealer by volume in America. But what exactly does VROOM do differently than any other Automotive retailer? The merchandising is good but nothing Extraordinary (basically the same as Texas Direct Auto always did it). All dealers are now offering at home delivery, take home test drives and all kinds of services that previously made “Online Auto Retailers” unique.
Here is a link to the article of the VROOM Purchase of Texas Direct Auto: https://www.autonews.com/article/20151216/RETAIL04/151219900/online-retailer-vroom-acquires-texas-direct-auto
NOW IS THE TIME!
With that being said… It is a great time for VROOM to take advantage of the fact they are known as an online automotive retailer with this IPO. It could give them even more runway to continue operating at a loss before profit is figured out. CarMax lost money for YEARS before they turned to profitability, unlike VROOM though CarMax didn’t have the competition that is in the current marketplace. CarMax itself (www.CarMax.com) are making huge changes to compete as an online retailer.
CarData, Inc. has products & services such as Spin360 (https://www.cardata.us/spincar-360/) that helps dealers merchandise their inventory online to engage with online shoppers & provide an interactive experience.