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$107M$208M

IPO ACV Auctions

Wholesale car auction platform
IPO
Medium risk

Revenues in 2019-2020

Invest in IPO ACV Auctions

This investment idea is no longer available. New applications are not accepted

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Investment Idea Details
The Company

ACV Auctions is a company operating as a dealer-to-dealer, online automotive marketplace. It offers a platform that enables used-car dealers to view, bid, and purchase car inventory via online auctions. It was founded in 2014 in New York, US.

Since inception, ACV Auctions has facilitated over 750,000 wholesale transactions between over 21,000 dealers and commercial partners. The company helps dealers source and manage inventory and accurately price their vehicles as well as process payments, transfer titles and manage arbitrations, and finance and transport vehicles.

Market Opportunity

The U.S. automotive market is a large and complex industry with an estimated 78 million units sold in 2019, generating approximately $1.7 trillion in sales between retail and wholesale markets. ACV’s primary business focuses on the wholesale market, a key channel for used inventory acquisition and disposition for dealers and commercial consignors.

In the wholesale market, there are an estimated 22 million used vehicles that are bought and sold annually, generating over $230 billion in sales and representing approximately 14% of the total U.S. automotive market and approximately 27% of all units sold. There are approximately 9 million dealer wholesale units that are transacted in the wholesale marketplace annually. Based on the average fee per unit sold in 2020 of $494, ACV estimates there is a total addressable market opportunity of $10.7 billion for its core auction marketplace offering, including transportation services.

Risks

ACV has a history of operating losses and may not achieve or maintain profitability in the future. Its recent, rapid growth may not be indicative of the future growth.

ACV may require additional debt and equity capital to pursue its business objectives and respond to business opportunities, challenges or unforeseen circumstances. If such capital is not available, its business may be harmed.

ACV participates in a highly competitive industry, and pressure from existing and new companies may adversely affect its business and results of operations.

Financials

ACV plans to sell 16.6 million shares at a price range of $18 to $20. The company intends to raise as much as $314M in an IPO of its common stock at about $3B valuation. ACV has raised a total of $351.6M in funding over 9 rounds from 14 investors, including Bessemer Venture Partners, Bain Capital, Softbank, Fidelity Management and others.

ACV booked $208M in revenue in 2020. Gross margin is around 45%. In the last 12 months ACV has shown positive cash flows provided by operating activities. Vroom, a New York City-based used car retailer and e-commerce company, went public in 2020 and provided 166% return to investors in the IPO. ACV is asking investors to pay 12.3x sales. ACV has demonstrated rapid growth in topline revenue, improving gross margin and growing cash flows from operating activities. This investment idea has a high expected return of over 40%.

How IPO Investments Work
1. Collection of funds

2-3 weeks before the start of the company publishes information about the opening of trading: financial statements for 3 years, a description of the company's business, plans for the future, as well as the risks that management sees in their own business. We analyze such offers and publish the best ones. Investors apply for deposits. Before the deadline for applications, you can change the request or cancel it.

Publication
18 Mar
Threshold amount
$50
2. Buy shares

We submit one large application for the purchase of shares by pre-subscription with reduced price to large investors. The application may be rejected in part or in full. Over the past three years, our applications have been rejected only three times. The next day, or every other day, we'll know at what price and at what percentage the order is executed, and we'll post it on «The my investment page».

Submit applications before
22 Mar
3. Start Bidding

The price of shares is rising from the first day due to the demand of investors deprived of the opportunity to buy shares before trading. Most of the stocks we've been recommending buying over the past three years have been starting to trade on the stock exchange at tens of percent higher than the price at which customers bought the shares. There comes a Lock up period when it is forbidden to sell shares purchased by subscription. Typically lasts 3 months.

Start Bidding
24 Mar
Return forecast
High (more than 40%)
4. Receiving profit

After the expiration of the Lock Up period, the investment is automatically closed and the investor receives a profit on account of the deduction commissions UT. You can always view the results of your past investments in investment archive.

End
28 Jun
Early profit fixation

Although no shares are allowed to be sold during the lock-up period, our traders seek to offer investors fixed profit by way of using various financial instruments, including forwards, options, short positions etc.

From the investor’s point of view this means that he or she may close an investment by paying a certain part of its value (as a rule, approximately 15 percent). This is due to high prices for the instruments which are employed to ensure availability of fixed profit. As such, you shall press any relevant button in the Investor Account as soon as it is active.

The closing procedure is similar to commencement of investment business. You shall file a bid which is executed within a business day by UT. So, your investment is closed at the price currently prevailing on the stock exchange. However, we rarely recommend using this feature, since upon expiry of an applicable lock-up period the average performance is higher.

Fee

FOR ENTRY

3 per cent of the share price. This fee is charged as soon as your investment bid is confirmed.

FOR EXIT

1.75 per cent of the purchase price paid for your shares as soon as trading is closed. This fee is charged upon closure of any relevant investment.

SUCCESS

20 per cent of the profit your derive. This fee is charged only if you show positive performance as of the moment any relevant investment is closed.

TO EARLY EXIT

Usually, 15 per cent (depends on the stock exchange environment). It is calculated per each investment individually.

Advantages Enjoyed by Those Investing with United Traders

RELIABILITY

Our risk managers ensure proper support throughout the entire transaction.

IN THE PROFIT FROM THE FIRST DAY

Such an approach allows it to limit extra risks related to bankruptcy of start-ups and considerably increase profit vs investors purchasing shares on open Market.

LOW ENTRY THRESHOLD

Millions of dollars are required to buy shares on a subscription basis. We have generated a pool of traders and investors which enables any newbie to participate in any transaction as aforesaid by investing just USD50 or more.

Invest in IPO ACV Auctions

This investment idea is no longer available. New applications are not accepted

View more ideas