![]() ![]() The market is very fragmented, with the top player, CarMax ( KMX ) only accounting for 2% of the total market despite market leaders in other retail verticals having a far larger market share.Į-commerce penetration is also very low in this market at just 0.9% in 2018. The used car industry is twice the size of the new car industry and is the largest vertical in retail, selling around 40mil units per year for a total market size of $840bil. Consumers can get paid store credit or cash for the car. If they decide to consider it, a Shift employee will come to their car and evaluate it, changing the sale price as required. By entering basic information in a 3-step process, consumers can get a quote for their vehicle from the comfort of their home. Customers can return the car within 7 days or 200 miles.Ĭonsumers can also sell cars on Shift. If they live less than 1 hour away from a Shift dealer, they can get the car delivered to them. After finding the car they want, users can easily purchase the car with a few clicks or schedule a test drive at a convenient time. The company offers over 1,000 different cars on its website, and users can easily use the search functions to find the car they want. Shift mainly operates a used car e-commerce platform in certain states in the US. ![]() In the next 7 years, the company raised 4 rounds of financing privately, grew revenue to $200mil, and in 2020, it finally went public via Insurance Acquisition Corp., a SPAC. Shift was founded in 2013, born out of the idea that technology could transform the car purchasing experience. Note: Ticker has changed to SFT after the merger. Revisiting the used auto space, I found that Shift Technologies (INSU) is likely the most compelling way to play this trend. E-commerce has accelerated substantially, and I have warmed up more to growth investing. After the pandemic, however, things have changed. Initially, I was very skeptical about the unit economics of the market and its long-term viability, and even had a put option position at one point against Carvana ( CVNA), the leader in the market (which I closed at a profit, thankfully). Well, it's been a while since I last wrote about the used auto market. ![]()
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