This startup pits dealerships against each other to bid on your used car
Selling a car is a pain. You can take the easy route and use services like Carvana, but you may wind up with thousands of
Selling a car is a pain. You can take the easy route and use services like Carvana, but you may wind up with thousands of dollars less than your car is worth. Or, you could hope for more by going to a dealership, but the dealer’s offer can vary wildly depending on what they’re looking for, never mind the extra time and effort on your part. A Los Angeles-based startup called Bidbus has spent the last few years trying to combine the best of those options, making it so sellers don’t need to leave their couch to get dealership-level offers. The company has created a digital marketplace where multiple dealers can bid on a car, a process that results in an average offer that’s about $2,000 to $3,000 higher than what Carvana offers, according to Bidbus’ founders. Now, looking to scale beyond its initial markets of California and Texas, the startup has raised a $15 million Series A funding round led by early-stage mobility fund Ibex Investors. The round also saw participation from Mucker Capital, FJ Labs, Motley Fool Ventures, DataPoint Capital, Walter Ventures, and the Car Dealership Guy’s Yossi Levi. Bidbus’ co-founder and CEO Duke Yan told TechCrunch in an exclusive interview that he came up with the idea after years spent buying and selling cars on his own.
When he tried to help his mom get rid of her car, the offers from dealers were insultingly low, so he put them in a group chat. To his surprise, buyers started bidding up the price. “Used-car affordability is not a financing problem. It’s a market efficiency problem. Consumers lack real price discovery for trade-ins, dealers struggle to source quality inventory, and much of the best supply is still trapped in people’s driveways,” Yan told TechCrunch. It’s a clever combination. Dealerships already buy cars at auctions to fill inventory, so the startup is not pitching a foreign idea. Yan said Bidbus helps dealers by bringing them the most highly-valued used cars, which tend to come from private sellers. The startup takes advantage of the spread between what online sellers are willing to pay and the typically-higher dealer payout: a difference that can stretch to thousands of dollars. But netting sellers more money, even after Bidbus takes a cut, wasn’t enough for Yan. He also wants to make the experience fun, and has taken inspiration from stock trading apps like Robinhood and social media apps like TikTok. Once a car is accepted on the platform, dealers only have a few hours to bid.
Bidbus shows live bids with the corresponding offers displayed in big font. The expectation, Yan said, is for Bidbus users to share screenshots or videos of this activity to raise awareness of the app and draw in new potential sellers. “Our vision is to make selling a car as transparent and competitive as trading a stock, where price is determined by market competition rather than a single buyer,” Yan said. Growing Bidbus hasn’t been easy, Yan said. The company was bootstrapped in the beginning, and while it got some early traction, he admitted he had to ban one of the platform’s largest dealers. “At that time, he was the only one that bought so many cars, and so he felt like he could get away with haggling or low-balling,” Yan said. “It hurt at first, but now our platform is better than ever. We have five to eight more dealers like him, buying a lot, upholding the standard [experience] that we want our customers to go through.” Jeff Peters, the partner at Ibex who led the funding round, said he held back on investing in Bidbus’ seed round mostly because the company was only operating in Los Angeles at the time.
The BriefWire