Three years ago, Ryan Keeton, with cofounders Ernie Garcia and Ben Huston, introduced Carvana to the world as a small car dealership on Marietta Street in Atlanta. What they promised was a new way to buy a car, one that combined the ease of purchasing online with the human factors that go into making both a financial and personal investment. Now, Carvana has brought their total funding to $460 million, closing a new $160 million Series C funding round this week.
Carvana’s journey to become the leading national online auto retailer resulted from bringing disruption to an aging but lucrative industry. The startup addressed a whole new generation of consumers wanting to preview purchases in 360 view from the comfort of their phones. They created car vending machines, five-story units, replete with cars available to buyers through the simple insertion of a coin. They brought ease, speed and savings to the car buying processes — securing new wheels through Carvana can happen in as little as 11 minutes, with an average savings of $1,681.
With new funding in tow, Carvana plans to add 20 new markets to its existing hold in 15 cities across the U.S., as well as increase its operations through talent acquisition. It will also bump its existing inventory to more than 10,000 company-owned vehicles by the end of 2016.
Keeton, cofounder and chief branding officer of Carvana, shares with Hypepotamus about the road from Atlanta to nearly a half billion in funding.
What goals does Carvana hope to achieve with this newest round of funding?
We are really focused on expansion, creating a better way to buy a car, faster. We are currently in 15 markets and plan to go into 20 within the next year.
Our innovation is in the car-ready vending machine. We launched 1.0 in Atlanta, and, what we call, 2.0 in Nashville. We’re working to bring that same [vending machine] model into every market we are in. We also offer free delivery and a great online buying experience. We will be working to build upon that experience for our customers. Great customer experience is at the center of what we do.
The third element is inventory — to have a great selection of cars that are company-owned. We currently have 5,000 cars, but plan to have 10,000 by the end of the year.
Lastly, it’s about building our internal teams — how can we hire great talent that will aid with operations, customer experience and improve our product.
What has it been like to transition from your first outlet in Atlanta to markets across the country?
When you first start something, the challenge, the momentum is really getting the market going. As our first city, we really knew Atlanta. Once we turned the corner in Atlanta, it was about seeing how we could scale operations into other markets. We are now in 15 — Nashville, Tampa, D.C. and others. The Atlanta market, where we have grown to become the second largest retailer of late model used cars, was a great place to start. We are seeing that every other market is growing as fast or faster than Atlanta. But first, it was all about taking that idea concept and working hard to get it out there.
Now, we want to take the Carvana experience to as many markets as possible. We want to implement a great strategy, and attract good people. The customer is always at the center of what we do as a company. We have tons of love in Atlanta, as it is our first market.
How is your technology innovating the car buying industry?
In general, our technology is very unique. We are the only company out there that enables the customer to see the car and purchase it online. Financing is part of the process, as well. It takes minutes. You are able see the real terms over every product in inventory. It is very different than spending four hours in a dealership. We have really thought from soup to nuts, all the way through. We are differentiating ourselves out there. We are vertically integrated, in that we are going from operations via delivery, pick-up to inspection and photographing the cars. It’s a full in-house process.
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