This month, we learned more about some retail technology vendors' efforts to help dealerships source used vehicles.
In January, when vehicle listings company CarGurus acquired a 51 percent stake in wholesale trading platform CarOffer, CarGurus said CarOffer had more than 2,500 dealerships fully on board its platform since its launch in 2019. By June, at the end of the second quarter, CarOffer had roughly 5,500 dealerships signed on to the tool — enrollment growth of about 50 percent compared with the first quarter of 2021, CEO Jason Trevisan said on the company's second-quarter earnings call this month.
CarOffer's revenue more than tripled in the second quarter compared with the first quarter of 2021, CarGurus CFO Scot Fredo said on the call. The company had projected that CarOffer's second-quarter revenue would be twice as large as pro forma revenue of $18.5 million in the first quarter of this year, Fredo said, but instead the figure soared to $57.3 million.
Dealerships using CarOffer can generate standing buy orders and receive instant offers on vehicles they sell. CarGurus recently added a feature, powered by CarOffer, to allow consumers to receive a fully online instant cash offer for selling their vehicle.
"The need for the industry's first instant trade platform for vehicles is evidenced by CarOffer's rapid growth and adoption," Trevisan told analysts. "We are incredibly impressed to see a business that has been operating for less than two years achieve strong top- and bottom-line growth."
Meanwhile, dealership marketing company AutoWeb in late July acquired assets of used-vehicle acquisition platform CarZeus for $400,000 in cash from McCombs Partners — the investment arm of McCombs Enterprises, affiliated with longtime auto dealer Red McCombs — and CarZeus' founder, Phil Kandera.
CarZeus buys vehicles from consumers and then resells them in the wholesale market, AutoWeb CEO Jared Rowe said on the company's second-quarter earnings call this month.
"Upon integration," Rowe told analysts, "our platform can more fully support vehicle transactions from start to finish, offering expanded resources for buyers and even more tailored leads and, ultimately, inventory to dealers."