The online automotive sales company Vroom will close its ecommerce business and focus on other operations, it announced Monday.
In ending its ecommerce business, Vroom intends to cease purchasing vehicles and sell the remaining used vehicles in its inventory using wholesale channels. In addition, it expects to reduce the size of its workforce.
The end of Vroom’s online automotive sales
“Two years ago, we set out to build a well-oiled machine, improve unit economics and dramatically improve our customer experience,” said Thomas Shortt, the chief executive officer at Vroom, in a public statement. “And I believe we achieved those goals. I want to thank our dedicated Vroommates, customers and business partners, as well as our Board of Directors and investors, all of whom have supported us over the years.”
Shortt explained that efforts to raise new capital came up short as Vroom sought to salvage its automotive ecommerce business. Without a path forward, the company will instead shift resources to its other lines of business.
Failed efforts to raise capital
“As we previously disclosed, we intended to raise additional capital to fund our operations and support the extension of our vehicle floorplan facility beyond its current expiration date of March 31, 2024,” Shortt said. “Despite significant efforts to do so, we ultimately were unable to raise the necessary capital in the current market. Obviously, we are very disappointed with this outcome.”
Vroom’s remaining business operations include the automotive financing company United Auto Credit Corporation (UACC) and retail-focused digital services provider CarStory. Both will continue to operate as Vroom’s online automotive sales end.
“Although we were unable to raise the capital necessary to achieve profitability in our ecommerce operations, we are committed to responsibly managing our remaining businesses and prudently deploying our capital as we seek to maximize value for all of our stakeholders,” said Robert Mylod, independent executive chair of Vroom’s board.
Vroom, along with other automotive ecommerce upstarts such as Carvana and Shift, focused on the used-vehicle market during the COVID-19 pandemic conditions of 2020. In 2023, online car sales were poised to grow as a share of overall auto sales in the U.S. However, new car sales appeared to be growing, while used car sales were projected to be down, according to data from Industry Data and Insights for Cars Commerce.
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