Photo: Vroom.com
In what is considered a very inspired business move, the online used car sales startup Vroom won $95 million in equity and used a part of the money to buy Texas Auto Direct (TDA), a competitor known for developing software that reduces the time it takes to process and recondition used cars.
The startup brings something new to the online car retailer market, because, unlike other companies, Vroom handles the entire transaction. Firstly, it takes the car from the seller, reconditions it, and then it delivers it to the buyer.
Vroom’s CEO Allon Bloch has set some big future objectives, such as sending a car throughout the U.S. within 48 hours of purchase, a seven-day money back guarantee, a no-questions-asked return policy, and a 90-day bumper-to-bumper warranty.
Currently, the company has two facilities, in Dallas and Houston, where cars are reconditioned and then kept until sold, but it will also open a 500,000 square feet facility in Indianapolis in early 2016, according to Fortune.
As the reconditioning part remains a challenge and Vroom wants to lower its company’s delivery times, the buying of its closest competitor was the logical move. According to Bloch, the software developed by TDA makes it possible to efficiently route the cars, and it does it better than anyone else.
Since time remains the biggest challenge, the TDA software will be even better because it is thought to shave two or three days off the entire car purchasing process. The only thing that could be a problem for this buy-off are the regulators. After a final decision is made, the two companies will co-exist at Vroom’s New York headquarters, and once the merger is finished, it will have no less than 500 employees.
Although the acquisition price remains unknown, Vroom wants to improve itself with the remaining money by buying more delivery trucks, and it also plans to open more reconditioning facilities.
Vroom’s CEO Allon Bloch has set some big future objectives, such as sending a car throughout the U.S. within 48 hours of purchase, a seven-day money back guarantee, a no-questions-asked return policy, and a 90-day bumper-to-bumper warranty.
Currently, the company has two facilities, in Dallas and Houston, where cars are reconditioned and then kept until sold, but it will also open a 500,000 square feet facility in Indianapolis in early 2016, according to Fortune.
As the reconditioning part remains a challenge and Vroom wants to lower its company’s delivery times, the buying of its closest competitor was the logical move. According to Bloch, the software developed by TDA makes it possible to efficiently route the cars, and it does it better than anyone else.
Since time remains the biggest challenge, the TDA software will be even better because it is thought to shave two or three days off the entire car purchasing process. The only thing that could be a problem for this buy-off are the regulators. After a final decision is made, the two companies will co-exist at Vroom’s New York headquarters, and once the merger is finished, it will have no less than 500 employees.
Although the acquisition price remains unknown, Vroom wants to improve itself with the remaining money by buying more delivery trucks, and it also plans to open more reconditioning facilities.
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