New- and used-car dealership chain AutoNation is the lead investor in Vroom’s $146 million series G funding, announced today. Other investors were T. Rowe Price, L Catterton, General Catalyst, and Fraser McCombs Capital.
In October, AutoNation had pumped $50 million into Vroom in exchange for a 7% stake.
Vroom CEO Paul Hennessy told Auto Finance News that increased collaboration between the two companies is “the next logical phase to [AutoNation’s] business evolution.” Over time, the companies will explore key areas of strength to leverage, he added.
AutoNation, too, has hinted at further collaboration. “Many synergies exist between the companies,” Donna Parlapiano, AutoNation EVP of franchise operations, mergers and acquisitions, and corporate real estate, told Auto Finance News via email. “It’s too early to tell exactly how this might take shape, but we are open to any opportunities that benefit the AutoNation business.”
“We believe investing and collaborating with progressive companies such as Vroom, as the digital transformation [of AutoNation’s vehicle sales strategy] continues, is prudent,” Parlapiano added. She noted that AutoNation isn’t slated to partner with any other digital-first automotive sales or fintech companies.
The latest funding round will be used in part to bolster digital offerings and for customer acquisition. “Whether it’s website development, mobile experience development, hiring smart engineers or really smart data scientists, the investment is going to go into this improvement of tech and process,” Hennessy said. To start, New York-based Vroom plans to increase traditional and digital advertising in the Dallas and Orlando markets.
Consumers looking to buy cars on Vroom’s platform can secure financing from a dozen lending partners, including Capital One Auto Finance, TD Bank, Ally Financial, and SunTrust Bank.Like This Post