ACV Auctions, a mobile platform that enables used-car dealers to view, bid and purchase car inventory via online auctions, has secured USD15 million in venture funding led by Bessemer Venture Partners (BVP) with participation from existing investors.
ACV will use the funds to expand into new territories.
BVP partner Bob Goodman will join the board of directors.
This series B funding builds on the USD5 million in venture capital that ACV Auctions secured in 2016, led by Tribeca Venture Partners, with participation from SoftBank Capital NY (SBNY), Armory Square Ventures and Rand Capital.
Additionally, ACV Auctions secured USD1 million in 2015 by winning the prestigious 43North start-up competition and, separately, USD1 million from angel investment that same year.
"More than 20 million used cars are bought and sold wholesale every year, mostly through physical auction sites," says Goodman. "Dealers are ready to take their business online and eager to exploit ACVs dedicated marketplace of both supply and demand. Because it was built from the ground up with the needs of dealers in mind, we believe ACV has an opportunity to revolutionise the ways cars are sold in auction."
Given that ACV fits within two historical areas of focus for the firm, marketplace companies and cloud/SaaS start-ups.
With ACV’s mobile platform, used car dealers select the type of cars they wish to purchase; when those vehicles become available ACV sends an alert to the dealer's mobile device, and a live auction follows. Auctions are conducted from dealer lots and last just 20 minutes. ACV's end-to-end solution includes a detailed condition report, which takes the guesswork out of assessing the value of any vehicle. Additionally, it is used to handle payments, title transfers and transportation arrangements for purchased vehicles.
Traditional car auctions, in comparison, are staged at off-site physical locations that can be far away – conventional bidding houses are aggregated regionally. Once there, dealers typically have to monitor multiple bidding lanes simultaneously; this makes it difficult to properly assess and secure the best wholesale vehicles. Payment, title transfer and vehicle transportation must be handled, and transacted, separately.
"Our innovative auction platform, and the high value it provides to dealers, continues to attract customers and investment from leading venture capital firms," says George Chamoun, CEO, ACV Auctions. "Our investment in technology and superior condition reports – both are a hallmark of our service – will continue to drive down costs for dealers and improve transparency for wholesale vehicles. Bessemer Venture Partners is one of the top investors in the country and will add tremendous value to our rapid market expansion."
ACV Auctions recently announced expansion into new territories, including Northeast Ohio, Washington DC and Eastern Massachusetts. The company now operates in: New York, including Buffalo, Rochester, Syracuse, Binghamton and Albany as well as Western Massachusetts, Pittsburgh and Northern New Jersey.
ACV currently has more than 60 employees and expects to hire 100-plus employees annually for the foreseeable future. In 2017, ACV Auctions will expand down the eastern seaboard and into the Midwest. To help drive interest, ACV provides incentives to the first major dealership group that signs up in each new market.
