Carvana‘s path to success has been paved by innovation since its inception in 2012. The online platform provides an easier way to buy a car through their now-ubiquitous large glass automobile vending machines. After filing for their IPO in March, as of 9:30 a.m. this morning, the bell rang at the New York Stock Exchange, catapulting Carvana (NASDAQ:CVNA) to the masses.
Wells Fargo Securities, Bank of America Merrill Lynch, Citigroup and Deutsche Bank Securities were the lead underwriters on the IPO. Carvana plans to sell 15 million shares in the IPO, with a targeted price range of $14-$16. This price range could bring their valuation to up to $2.1 billion.
“It’s very gratifying that investors have responded so enthusiastically to the Carvana message and business model,” says Ernie Garcia, co-founder and chief executive officer, tells Hypepotamus. “To disrupt the traditional used car business, we had to change the customer experience from top to bottom and prove that consumers would embrace the concept. The IPO is our largest milestone since our launch in Atlanta in 2013, however, it’s one step in the journey. We’re excited by the tremendous opportunities ahead for us.”
They’ve come a long way since introducing the company to the world in Atlanta — their first launch market. Currently in nearly two dozens markets, Carvana raised their latest round last August (for a combined $460M total) to continue their massive expansion. Carvana disrupted the old dealership model of spending entire days talking to an often-pushy salesperson and signing a large quantity of documents just to get a new car.
“People are tired of spending an entire Saturday at a car dealership. The sales tactics and countless hours taken away from someone’s weekend aren’t adding up anymore. Since our launch in Atlanta in 2013, we have seen consumers responding enthusiastically to our customer-centric, online approach — our alternative to the traditional car buying experience,” says Garcia.
Carvana takes the buying experience online with 360-degree videos and real-time approval for a car loan — all under 10 minutes. Customers can either pick it up at one of the five-story “vending machines” at select cities or have it delivered free, next day, to their home.
“It’s a big undertaking, we’ve made tremendous strides and consumers have shown us that they’re ready and excited for the Carvana way of buying cars,” says Garcia.
The company has not yet turned profitable. According to the SEC filing, Carvana reported revenue of $365 million in 2016 and a net loss of $93.1 million last year. Last year, according to Carvana, it sold 6,288 vehicles just in Atlanta, an increase from the previous year.
“Today, investors have shown that they also believe in our approach,” says Garcia. “We are excited to celebrate with our employees who have worked diligently to build this company, and we would be remiss to not extend a sincere thank you to the Atlanta community. Their role in supporting our proof of concept is immeasurable and will forever be an important part of the Carvana story. We’re excited for our future, and what it holds for our company and millions of car buyers across the country.”