Recently my younger brother bought his first car. He went to a random used sales lot near Boston, and let some guy with greasy hair talk him into something he didn’t want. Less than 24 hours later, he got a queasy feeling in his stomach and wanted to back out of the deal. Except, of course, the paperwork had been signed and the dealer wasn’t going to let him return the car or refund his money. He was stuck with it.
But that experience, a common one among young car buyers, may soon be a relic. A relatively young website called Vroom is trying to keep car buyers from feeling duped by giving them seven days to return a purchased car after it’s been delivered.
To expand its stock of cars, the company’s raised $54 million from General Catalyst Partners, T. Rowe Price Associates, Catterton, and a bevy of angels.
In addition to the fresh cash, Vroom has hired Michael Akrop, former VP of Finance for online shoe seller Zappos, to help the company grow its distribution network.
Vroom is an entirely digital car store that buys and sells a range of cars, 32 brands including Tesla. Once a car is purchased, Vroom will ship the car to the buyer anywhere in the U.S. for free within two days. From the date of delivery, consumers have seven days to return the car for a full refund. Vroom’s CEO Allon Bloch says Vroom doesn’t charge restocking fees (or any other kind of fee) when consumers decide to return a car.
In addition to its website, Vroom also has a mobile app for individuals with cars to sell.
Vroom has been around for two years and this year the company expects to generate $300 million in sales. Right now, Vroom has a stock of 1400 cars, but it wants to expand. With the additional funds, it plans to buy up more cars and grow the number of refurbishing centers where it tests, tweaks, and stores cars for sale. The company currently has one 22-acre building in Texas for fixing up cars, but it hopes to build one of those centers each year.
Vroom also wants to build out a delivery network so that it can deliver cars the same day they’re purchased. At the moment, the online retailer relies on third parties to make car deliveries.
In total, Vroom has raised $73 million in equity funding to date.
Update: the name of Michael Akrop has been corrected to reflect the appropriate spelling. A previous version of this article referred to him as Michael Acron.
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