TechCrunch reported on March 5, 2018 that on-demand car buying and selling startup Vroom is closing two physical locations including one in Dallas, as well as cutting one quarter from their staff from their New York City and Stafford, Texas headquarters.
Think you have a lemon, click here to fill out a 60 second form.
The startup, which raised more than $300 million in venture funding, issued a statement confirming the layoffs are part of an effort to “sharpen their focus on profitability.”
“While Vroom’s business is healthy and financially stable, we are always looking to align our resources to fulfill our long-term vision and deliver on our mission,” the statement said. “In sharpening our focus on profitability, we recently made some adjustments to our strategy that has impacted our headcount. While decisions like this are never easy, we are putting the company in a better position to become the leader in online car buying and continue to invest in future areas of growth.”
TechCrunch writer Ingrid Lunden wrote the moves underscore the challenges of scaling and running car sales startups. Vroom raised roughly $320 million from investors including General Catalyst, T. Rowe Price and Altimeter. It most recently closed a $76 million funding round last July valuing the company at just under $655 million, according to Pitchbook.
Vroom’s layoffs come at a tumultuous time in the industry. UK used car sites Carspring and Hellocar shut down in 2017, and Shift laid off staff and paused operations in one market. The California-based online marketplace Beepi shut down in 2017, with Vroom purchasing some of its components.
Vroom’s CEO Paul Hennessy said the site isn’t a marketplace, as they buy cars and recondition them before reselling them.
“Marketplaces bring together buyers and sellers and then have little value add,” Hennessy said. “We curate and bring that content to consumers. In a vertical that lacks trust like used cars, we believe that building a platform, with the warranties and service, is what separates us.”
Lemon law attorneys help their clients by dealing directly with the manufacturer on the clients’ behalf, working to promptly resolve the issue and get their clients back on the road. Thanks to the Magnuson-Moss Warranty Act, attorneys can seek their fees directly from the manufacturer, meaning a client can obtain legal counsel without having to pay attorneys’ fees directly out of pocket.