Buffalo, New York-based ACV Auctions is a rapidly growing online wholesale vehicle marketplace company that provides used-car dealerships and franchises with a more effective and transparent way of buying and selling wholesale vehicles in the form of 20-minute auctions. ACV’s technology modernizes auction operations and provides third-party inspections, account management, title and payment processing, arbitration, and transportation.
Recently, ACV announced it has raised $93 million in Series D funding in order to continue growing nationwide. And there are thousands of dealers turning to ACV Auctions to buy and sell wholesale inventory without ever leaving dealerships.
Photo: ACV Auctions
This round of funding was led by Bain Capital Ventures and early investor Bessemer Venture Partners. Future Fund, Tribeca Ventures, and Armory Square also participated in this round. Brian Goldsmith of Bain Capital Ventures said that ACV has soared past the startup phase at an incredible pace. And Bessemer Venture Partners partner Bob Goodman said that his team has been impressed by George and the team’s ability to stay ahead of the competition by moving fast and innovating on their market leading product.
Launched in June 2015, ACV now sells more than 10,000 wholesale vehicles a month through its auction platform, which is 1% of all vehicles sold at auctions today. By the beginning of 2019, ACV is going to operate in 80 markets coast-to-coast by year-end. This is up from 30 markets as of the beginning of 2018.
Since margins are compressing from new vehicle sales, many dealers have been turning to wholesale to make up for the loss. So ACV helps dealers eliminate the gamble involved in selling and buying used vehicles from traditional sources. ACV provides buyers with transparent information to make better decisions about vehicles they are interested in purchasing. And ACV’s wholesale process enables dealers to access a national buyer pool, which reduces the risk of arbitration and provides quicker inventory turnover.
ACV has raised more than $145 million in funding since 2015. And this new round of funding will enable ACV to double down on product and engineering, expand its platform, and provide real-time data analytics to dealers. And ACV is going to continue its nationwide expansion to more than 140 territories in 2019.
“Thousands of dealers around the country are turning to ACV Auctions as the trusted, transparent digital marketplace to buy and sell their wholesale inventory,” said ACV’s CEO George Chamoun in a statement. “We are proud to partner with Bain Capital Ventures and Future Fund to help fuel our continued growth. We have the resources to significantly increase investment in our platform, grow our passionate team across the country and continue to exceed dealers’ expectations.”
ACV is growing its headcount by about 30 people per month and now there are 500 people working for the company across the country. This is up from 200 people at the beginning of this year.
“One hundred percent of our wholesale inventory is sold digitally through ACV,” acknowledged Scott Spadafora, a used car manager at Circle Chevrolet in Shrewsbury, New Jersey. “With ACV, we’re able to free up space quickly, create new deals and bring in new customers, so it’s very beneficial for us. I haven’t done a bid-sale since starting with the platform and I never will again.”
ACV has achieved an annual run-rate of selling $1 billion in gross merchandise per year. Since the automotive auction industry is selling approximately $100 billion in gross merchandise per year, ACV still has a lot of room to grow.