Online used car platform Vroom announced that it has raised a fresh $50 million Series E round from newcomers Altimeter Capital and Foxhaven Asset Management, with participation from existing investors L Catterton, General Catalyst Partners, and Allen & Company, among others.
This cash injection takes the company’s total funding to $218 million and comes a little more than a year after Vroom’s $54 million Series C round, which was followed swiftly by a $95 million Series D round five months later.
Founded out of New York in 2013, Vroom sidesteps second-hand car salespeople by offering what it touts as “quality pre-owned cars” through its website. Vehicles are delivered to your door with a seven-day test-drive included as part of the package. But the platform isn’t just aimed at making buyers’ lives easier, the company also wants to get sellers on board by removing friction from the listing process — sellers only need to scan the vehicle identification number (VIN), submit some photos, and answer a few questions.
Back in June, Vroom named former Priceline chief Paul J. Hennessy as its new CEO, and he believes Vroom has positioned itself well to capitalize on the growing shift toward buying and selling cars online.
“The reaction to both the ease of the car buying and selling experience, as well as the unparalleled quality of refurbished cars, has been overwhelming,” said Hennessy, in a press release. “For a company that is only three years old, we are just beginning to roll out our product innovations that will soon include 100 percent digital paperwork and auto financing enhancements.”
The used-car industry has emerged as a market ripe for disruption, with the likes of Carvana recently raising $160 million to help people buy cars online — an effort that includes expanding its quirky coin-op car vending machines.
As part of Vroom’s $95 million raise last December, the company snapped up Texas-based competitor Texas Direct Auto, before announcing just last month that it would soon let people browse for used cars through virtual reality showrooms.