Technology isn’t just changing the way we drive vehicles, it’s also changing the way we buy them. A New York City-based startup by the name of Vroom is one of the companies bringing about this change by selling used cars online. With more than $300 million in revenue this year, Vroom clearly knows what it’s doing, which why investors just poured $95 million in funding into the company. The funding is being used to acquire a Houston-based startup by the name of Texas Direct, which refurbishes cars and then sells them online, having become the largest seller on the eBay Motors site.
Vroom — a New York-based startup that hawks used cars online — is gearing up for a Texas-size acquisition. The fast-growing firm has raised a whopping $95 million to fund its proposed purchase of Texas Direct, a Houston-based car refurbisher founded in 2002 that has become the No. 1 seller on the eBay Motors site. It’s a big bite for Vroom, whose business will top $300 million in revenue this year, , according to CEO Allon Bloch. Combined, the two companies will boast a $900 million business. That — coupled with the fact that Vroom is “growing very quickly,” according to Bloch — would appear to put Vroom’s market value comfortably in “unicorn” territory above $1 billion. Vroom hasn’t yet disclosed the participants in its latest funding round, noting that the acquisition still faces regulatory approvals. This summer, it raised $54 million from investors including Catterton, T. Rowe Price and NFL Hall of Famer John Elway. Nevertheless, Bloch isn’t interested in talking about unicorns, but rather focusing on the nuts and bolts of used cars. In particular, the veteran tech exec is looking to tap Texas Direct’s expertise at reconditioning gently used autos at two warehouses in Houston and Dallas.
