Carvana stays in the fast lane with $160M funding infusion
More auto vending machines on the way
Get ready for some more car vending machines.
Carvana, a Phoenix-based online vehicle retailer that has opened two automated vehicle dispensers, has announced another round of venture-capital financing that should help keep it in the fast lane.
The privately owned company says it plans to use the funds to expand its physical operations, hire more employees, invest further in technology and add to its used-vehicle inventory. The latest $160 million infusion of private investment capital brings total funding to $460 million.
Carvana, which claims to be the most heavily funded private online auto dealer, vows to revolutionize the ways used vehicles are sold. It currently offers nearly 5,000 cars and trucks for sale, with a goal of expanding to around 10,000 by year’s end. It promises hassle-free purchases that can be completed in a matter of minutes, saving customers time and money. The company also accepts trade-ins.
About a quarter of all buyers complete the process within 20 minutes, CEO Ernie Garcia says. “The speed and ease is unmatched in the industry,” he said.
As an attention-getter, Carvana has created what looks like a giant car vending machine near Nashville, with cars — arranged vertically behind glass — that can be delivered to customers with the drop of a giant coin.
The five-story structure holds up to 20 vehicles. Buyers insert a special, oversized coin, which triggers a robotic arm that grabs the desired vehicle, sending it on its way. Eventually, a robot picks up the car and drives it to a bay. Customers utilizing the vending machine have already purchased their vehicles, with the vending- machine process more a formality, though an unusual one.
Carvana earlier opened a smaller, less-elaborate car vending machine in Atlanta. The company vows to build more such facilities in other markets.
Buyers who live outside the At- lanta or Nashville areas can take advantage of a Carvana “fly and drive” promotion. The company pledges to subsidize $200 of customers’ one-way airfare to either of those cities. A buyer can then drop the special coin in the machine, pick up the vehicle and drive it home.
Founded in 2013, Carvana is partly owned by DriveTime Automotive, based in Tempe, Ariz., where Garcia served as an executive. DriveTime, the nation’s largest used-vehicle retailer, runs a network of roughly 140 dealerships around the nation, geared mainly to subprime customers or those with poor credit histories.
Carvana doesn’t have dealerships, with buyers instead browsing autos online at carvana.com. Consumers can use computers or phones to shop, complete all paperwork, apply for and receive financing and trade in vehicles, too.
Purchased cars can be picked up at various locations or delivered to a customer’s driveway.
Carvana guarantees that the vehicles it sells weren’t involved in accidents, and it runs each car or truck through a 150-point inspection prior to sale. It also has a 100-day/4,189 mile bumper-tobumper warranty, as well as a seven-day, no-questions-asked return policy. The 4,189-mile figure reflects the average amount of driving done by U.S. motorists in 100 days, Garcia said.
About a quarter of all buyers complete the process within 20 minutes. “The speed and ease is unmatched in the industry.” Carvana CEO Ernie Garcia