SAN FRANCISCO: In the last few years, venture capitalists (VCs) got really excited about used cars. They thought selling cars online or through mobile apps could upend the pre-owned auto market and make dealerships irrelevant. Investors pumped more than US$860mil into four companies – Beepi, Carvana Co, Vroom Inc and Shift Technologies Inc. – from 2013 to 2016.
But then Beepi abruptly closed most of its operations in December. The startup had spent US$150mil before investors realised it was a clunker. Beepi began selling itself for parts early this year to repay creditors, the Wall Street Journal reported. Carvana, which took US$460mil from private backers, pushed ahead with an initial public offering last week, hoping investors wouldn’t be deterred by the implosion of its closest competitor. The stock has declined 28% since going public last Thursday. Vroom remains private.
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