Shift announced last month it would be going public through a reverse merger with Insurance Acquisition, known as a special purpose acquisition company, which will get a minority stake after the transaction is complete. At press time, Shift had not shared a date for the offering.
Like Carvana and Vroom, Shift is a loss-making company that expects large top-line growth, according to its financial statement. Its net loss was $11.2 million for the first quarter. That followed losses of $55.7 million in 2019 and $38.8 million in 2018.
The company sold 11,091 vehicles last year and estimates sales of 12,505 this year, followed by 24,286 in 2021 and 45,000 to 55,000 in 2022. In dollar terms, Shift had $175 million in net sales last year and estimates sales of $194 million in 2020.
Losses aside, the apparent investor appetite for such e-commerce companies shows how ripe the used-vehicle market is for disruption, companies such as Carvana, Vroom and now Shift have asserted.
“The e-commerce part of used auto represents less than 1 percent of the market,” Russell said. “It’s kind of hard to find verticals where that’s true in consumer retail today. Basically all of consumer retail has been deeply affected by the Internet.”
And for vehicle sales, this phenomenon has only been fueled further by the COVID-19 pandemic, Russell said.
