The Rubber Doesn’t Have To Meet The Road: Why We’re Investing In ACV Auctions To Transform The $15 Billion Wholesale Used Car Market

Brian Goldsmith
Dec 19, 2018 · 3 min read

In a world where almost anything can be purchased with a simple click of a button — clothes, movie tickets, groceries, or computers — you would think that buying used cars online would be easy as well. But without the help of a trusted intermediary, there’s an understandable desire for buyers — consumers and dealers alike — to kick the tires, feel the leather and stick their heads under the hood before making a four- or five-figure non-refundable purchase.

While a number of startups aim to fix the process for consumers, the far bigger problem faces dealers. A typical consumer might buy a car a few times a decade, but dealers buy and sell used cars daily and must regularly transact in the wholesale market. For generations, the main option these dealers have had is to send a car to a physical auction block — a process that takes too long, costs too much and doesn’t always yield a sale.

That’s why today we are thrilled to announce that we are leading a $93 million Series D investment in ACV Auctions, an online marketplace for wholesale auto auctions that’s revolutionizing how dealerships across the nation buy and sell cars. ACV’s platform modernizes wholesale auction operations from beginning to end, including sophisticated condition reports, live online auctions, title management, transportation, payments and lending. It serves as a trusted intermediary, empowering both buyers and sellers with the knowledge that the process will be easy, transparent and fair.

We first met ACV over two years ago, shortly after it was co-founded by a trio of technology and automotive experts in Buffalo, NY. At the time, it was a startup operating primarily in just a few local markets. Under the leadership of CEO George Chamoun and the rest of the management team, ACV’s growth to-date has been exponential. It now serves buyers and sellers across half of the United States, and expects to roll out nationally within the next year.

ACV has seen unprecedented growth for a number of reasons:

  • Customers simply love the experience ACV provides.
  • Its fees are lower than traditional physical auction fees, giving a better price to the buyer and better margins to the seller.
  • It provides meaningful time savings to buyers and sellers by removing the need to transport cars and send employees to the auction block.
  • Most importantly, the company has become the most trusted way for a dealer to buy a wholesale vehicle, by using its own team to inspect, photograph and document the condition of cars, while guaranteeing the quality of the team’s work.

We are honored to add ACV to the BCV portfolio, which includes hundreds of companies across a range of business-to-business software, data and services sectors where there’s massive market opportunity. And the $600 billion+ automotive industry is no exception. It’s why we’ve made a number of auto-related investments, including Hireology (recruiting platform for dealerships and other distributed organizations), defi Solutions (loan origination and management software for automotive lenders), Passport (parking and payments software for the transportation industry), vAuto (inventory pricing/management for dealerships), TrueMotion (telematics for auto insurance) and Inrix (traffic data solutions).

The opportunities for disruption are large and many. We couldn’t be more excited to partner with George, the entire ACV team and an exceptional group of co-investors — including Bessemer Venture Partners, Tribeca Venture Partners, Future Fund and Armory Square Ventures — to bring physical auctions to the digital world and redefine the marketplace for wholesale used autos.

Ideas from Bain Capital Ventures

Ideas and perspectives from the Bain Capital Ventures team.

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