Not only that, but the current environment, in which the coronavirus pandemic forced many Americans to purchase more goods from their homes amid stay-at-home orders, has only accelerated this acceptance, he said.
Vroom does not see itself competing with fellow online used-vehicle retailer Carvana, Jones said. “It’s really the 43,000 dealers in the U.S. and the entire peer-to-peer market,” he said. “That’s really what we see as the competition and what we see as [Vroom] disrupting.”
In filings, Vroom called the used-vehicle space “highly fragmented” and “ripe for disruption.” It highlighted $814 billion in used-vehicle sales last year in the U.S., with 40 million vehicles sold. Within that, there was only a 0.9 percent e-commerce penetration and 9 percent market share for the top 100 dealers.
At least one of those incumbent retailers is backing the disrupter. AutoNation in 2018 announced a $50 million investment in Vroom. The largest dealership group in the U.S. held 4.8 percent stake after the offering, according to Securities and Exchange Commission documents.
Like Carvana, Vroom has seen strong top-line growth while reporting losses. Its revenue in the first quarter rose 60 percent to $235.1 million, but its net loss was $41.1 million, compared with a net loss of $27.1 million in the first quarter of 2019.
For all of last year, the company’s revenue grew 39 percent to $1.2 billion, while its net loss widened to $143 million from $85.2 million in 2018.
Jones said the company has a “clear path to profitability,” and it will be achieved once the company hits scale. “We think we get to profitability at about 200,000 units,” he said.
For comparison, Carvana sold 177,549 used vehicles last year. Vroom sold 18,945 vehicles online last year, up from 10,006 in 2018. In the first quarter of this year, it sold 7,930 vehicles online compared with 3,187 a year earlier.
