BOSTON — CarGurus is looking to expand its online vehicle marketplace business into dealership software and technology, and in doing so, add companies to its portfolio that can help it grow.
"We plan to use [mergers and acquisitions] to build our product suite," CFO Jason Trevisan told Automotive News here last week at the company's first automotive conference, Navigate. "I anticipate that we'll buy more in the coming year and years."
That likely will include an acquisition in 2020, Trevisan said. He declined to provide details.
The Cambridge, Mass., company is looking to move beyond its roots as a third-party vehicle listings marketplace. Trevisan said CarGurus considers dealer software — including digital marketing, online shopping conversion, inventory management, pricing tools, websites and customer relationship management — to be a growth opportunity.
"Those are areas that are really close to the listings product we're giving them today, but just sort of reach a little bit deeper into the dealership," Trevisan said. "It's definitely not out of the question. I think it's a matter of how we set priorities at the company."
CarGurus has bought one company since it was founded in 2006 — PistonHeads, a used-vehicle listings website in the United Kingdom. CarGurus bought it in January to help add listings in that country.
Any expansion likely would fill one of three needs, Trevisan said: speeding up the growth of its core vehicle marketplace, acquiring companies that sell products to dealers adjacent to CarGurus' main business and accelerating its presence in emerging business areas, such as digital peer-to-peer vehicle sales. CarGurus is a marketplace for people to sell cars to one another, and last quarter it launched digital peer-to-peer sales in three states, Trevisan said.
"We are looking at ways that we could buy in the peer-to-peer overall category to get us to market faster ... than if we built everything on our own," Trevisan said.
CarGurus last week announced two new products to its dealer customers. It added a second lender, Westlake Financial Services, of Los Angeles, to a financing component that launched this spring with Capital One. It's in pilot testing with 1,000 dealers, with plans to allow customers to get preapproved for financing through Westlake with dealers that Westlake and CarGurus have in common, said Tom Caputo, CarGurus' chief product officer.
CarGurus plans to launch a "real-time performance marketing" product suite in early 2020. The suite will repackage its SEM Plus marketing tool, help dealers reengage with website visitors and add marketing for dealers through Facebook.
CarGurus is set to report its third-quarter earnings Nov. 5.