Beepi Raises $60 Million In Investments To Sell Used Cars To Millennials

Used-car marketplace Beepi Inc. has raised $60 million in funding from venture capital firms, based on the projection that customers will be willing to purchase used cars on their smartphones without actually taking a test drive in the automobile first.

Beepi is targeted at millennials who are accustomed to using their smartphones for an increasing number of purchases. Customers in their late-20s and early-30s are the most likely to gravitate to this type of service initially, with the possibility that older consumers will follow suit. While there are other growing online car dealers such as CarMax and Auto Nation, investors feel that there is the possibility for an upstart such as Beepi to come in and dominate this massive market.

Beepi initially launched in April, and the service allows potential buyers to view available used cars online and to purchase them via bitcoin, direct debit, financing or credit cards. The cars have already been tested by inspectors, who drive out to wherever the vehicles are located and complete a 185-point inspection prior to the cars being certified for sale on the site. A proprietary pricing algorithm is used to ensure that a good price is offered based on the geographic market.

Beepi stands out from others as its competitors allow for searching available cars, booking a test drive, and inquiring about financing, but don’t allow the customer to go through with the final sale. When using Beepi, a customer can finalize the deal on their smartphone and have the car arrive at their door without having ever seen it in person before. The question that marketers are asking is whether or not customers will actually be willing to trust the service to this unprecedented degree when it comes to a large purchase such as a car.

“Because we are a regional play and a national play, there is a buyer for every car,” explained Owen Savir, Chief Operating Officer and co-founder of Beepi. “We see demand from different cities and states and it’s easy for us to triangulate what they have and what they want. In Dallas, they want the Ford 150 [trucks] and in San Francisco they like their Mini Coopers.”

All car dealers know that interest in brands and types of vehicles varies based on demographics and geographic location, and Beepi is well positioned to utilize this knowledge to become a major player in online sales. The company boldly guarantees that sellers will sell their car within 30 days for at least $1,000 more than what they could get at a dealership. Otherwise, Beepi promises to purchase the vehicle. The company takes care of the paperwork and delivery while taking a share of the sale price.

The funding will be used to expand the company to new cities across the U.S., beyond its current markets of San Francisco, Los Angeles and San Diego. The company claims to be making revenue at a rate of $15 million annually.

There will certainly be a great deal of resistance from regulators and dealerships, and experts have varied opinions about whether or not the pushback will be severe enough to prevent Beepi from gaining a significant share of the marketplace. However, with the company’s growing funding, car dealerships and marketers will be watching closely as Beepi attempts to expand its control of the market.