We’ve warned everyone about these guys in a couple of articles in the CarPro Show newsletter.
- Jerry Reynolds, CarPro Show Host
Vroom, an online used car platform, is going out of business. The company shared its announcement on January 22, 2024. In December, the used car retailer settled a lawsuit with the Texas Attorney General for $3,000,000 for deceptive trade practices.
For some background, here are some previous posts we've shared:
- Last April when the Texas AG filed suit on Vroom - Read More
- And September of 2021 when the BBB issued a scathing report on Vroom - Read More
In the latest development, last week Vroom released this statement in part:
Vroom announced that it is discontinuing its ecommerce operations and winding down its used vehicle dealership business in order to preserve liquidity and enable the Company to maximize stakeholder value through its remaining businesses. Vroom owns and operates United Auto Credit Corporation (UACC), an automotive finance company, and CarStory, an AI-powered analytics and digital services for automotive retail. UACC and CarStory will continue to serve their third-party customers and focus on growing those businesses.
Under the Value Maximization Plan approved by Vroom’s Board of Directors, the Company is suspending transactions through Vroom.com, planning to sell its current used vehicle inventory through wholesale channels, halting purchases of additional vehicles, and executing a reduction-in-force commensurate with its reduced operations.
Thomas Shortt, the Company’s Chief Executive Officer, said “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. 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. Two years ago, we set out to build a well-oiled machine, improve unit economics and dramatically improve our customer experience 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.”
Robert Mylod, Independent Executive Chair of the Board, said “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.”
You can find the entire Vroom statement here.
Photo Credit: Vroom/Facebook.
