NEW YORK – An eCommerce platform partially funded by Detroit billionaire Dan Gilbert announced Friday that it has closed a $254 million Series H funding round that will be used in part to expand and staff up its Detroit engineering hub.
“Detroit is ground zero for all things automotive,” said Vroom CEO Paul Hennessy in an interview with MITechNews.Com. “We’re looking for tech hires that are related to or been in the auto industry.”
Vroom provides a scalable, data driven technology platform that brings all phases of the used vehicle buying and selling process to consumers wherever they are.
“This new round of funding provides the necessary resources to further grow and scale our business,” said Hennessy. “We are thrilled to receive continued support from investors and partners, reinforcing the Vroom model as a tremendous opportunity to bring about a fundamental and enduring change in the used vehicle industry.”
Through its ecommerce platform, Vroom offers thousands of low-mileage, reconditioned vehicles with delivery directly to consumers. It also arranges financing through leading lenders and offers warranty, insurance and other value-added products that provide convenience for its customers.
Vroom is very similar to a better known used vehicle eCommerce platform called Carvana. But Hennessy said in an interview with MITechNews.Com that Vroom’s real competition is the 43,000 vehicle dealerships in the United States using more traditional marketing tools that are far less integrated.
“Vroom offers consumers, end-to-end eCommerce platform that allows customers to do what do from dealership, but from their home or office. And we have the car delivered to them.”
Vroom’s Sell A Car option offers customers who wish to sell or trade in their vehicles to receive real-time appraisals, market-based pricing, loan payoffs and at-home vehicle pickup.
Delivery costs are $499, about half that charged by automakers to deliver new vehicles. Customers can also secure financing through Vroom to buy a late model vehicle that Vroom reconditions. Typical Vroom vehicles are one to four years old, Hennessy said. Many are coming off OEM leases.
Vroom also announced that Chase Auto is now a financing partner, providing better lending rates for its customers.
“Chase has millions of customers nationwide that have cars that need upgrade,” he said. “Vroom is a viable channel for Chase customers to buy cars. It’s logical for the two of us to deliver value for Vroom and Chase customers. But we also have a stable of other financing vendors.”
In Detroit, Vroom will use some of the investment money to beef up its engineering hub opened in August, Hennessy said. Now 25 engineers, product managers and others work there. The center mirrors hubs also found in New York and Houston. Vroom is looking to hire data scientists, designers, and other technicians to help scale its platform.
The final total amount of Vroom’s Series H round is $254 million, bringing Vroom’s total funding to date to $721 million. The round was led by Durable Capital Partners LP, and funds and accounts advised by T. Rowe Price Associates, Inc., L Catterton and others also participated.
“I’ve worked with the Vroom team for years and I’m pleased to announce that it is one of the first companies that my new firm is investing in,” said Henry Ellenbogen, CIO at Durable Capital Partners LP. “We’re very excited to be a part of the future of automotive retail and support Vroom in its efforts to move the car buying and selling process online for consumers across the country.”
For more information, visit Vroom.com.