Online used car marketplace Beepi has landed a $12.7 million investment from two notable angel investors and more than 80 investors on the crowd-funding platform AngelList, in a move the startup says will help it swap out early backers for investors that can add strategic value to the company.
Used Car Site Beepi Lands $12 Million From Yuri Milner and AngelList’s Largest Ever Investment
The startup says the investment will help it swap out early backers for investors that can add strategic value to the company.
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Jason Del Rey has been a business journalist for 15 years and has covered Amazon, Walmart, and the e-commerce industry for the last decade. He was a senior correspondent at Vox.
Yuri Milner, the Russian internet investor, and Scott Bommer, founder of the hedge fund SAB Capital, contributed a total of $8 million. Milner’s involvement could be seen as a move to give his firm, DST, a good shot at leading a potential large future investment in Beepi. Another $2.7 million came from a syndicate of tech industry angel investors on AngelList organized by the early-stage investor Gil Penchina. It’s the largest investment made by an AngelList syndicate since the platform was founded in 2010.
The entirety of the new investment, which includes an additional $2 million from two early investors, will be used to buy out some of Beepi’s first backers, who wrote early checks of $10,000 to $15,000 each, according to CEO Ale Resnik.
“They are getting an amazing return on investment and understand this is the best for Beepi,” he said in an interview.
The new funds are essentially an add-on to Beepi’s $60 million Series B investment announced in October. Resnik said the new investment came with the same terms as the $60 million round, which valued the company at about $200 million, a source previously told Re/code. Beepi’s service, which just launched publicly in April, lets car owners enter inbasic information about a vehicle they want to sell and then gives them a quote that Beepi says will always be higher than dealer trade-in prices. If the seller agrees to the quote, Beepi sends out its own inspector to clear the car for listing on the site. If a buyer doesn’t purchase the car within 30 days, Beepi says it will buy the car itself.
Resnik said he was interested in working with an AngelList syndicate because he’s a big supporter of crowdfunded investments for young companies, and hoped this would encourage more startups to look to AngelList for funding.
Penchina, the former CEO of Wikia.com and a veteran of eBay, said he sees in Beepi the potential of making buying and selling a car online as easy as much less expensive transactions.
“I used to be at eBay and am well aware of how much friction there is in buying a car from eBay motors (I sold two there),” he said in an email. “Beepi takes that friction to zero.”
This article originally appeared on Recode.net.
