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$855 mln$1.2 bn

IPO Vroom

Online used car retailer
IPO
High risk

Revenues in 2018-2019

Invest in IPO Vroom

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

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Investment Idea Details
The Company

Vroom (VRM) sells used, reconditioned cars directly to consumers via its website and app. Vroom will pick up cars from sellers, and deliver to buyers via what it describes a “private-seller acquisition model” built on a mobile-enabled user interface. It also offers financing, warranty, and insurance products.

Ecommerce units sold increased by 149%, to 7,930 for the three months ended March 31, 2020 from 3,187 for the three months ended March 31, 2019. The company was founded in 2013 with headquarters in New York.

Market Opportunity

The U.S. used automotive market is the largest consumer product category, generating approximately $841 billion from sales of approximately 40 million units in 2019. The industry is highly fragmented with over 42,000 dealers and millions of peer-to-peer transactions.

It also is ripe for disruption as an industry that is notorious for consumer dissatisfaction and has one of the lowest levels of ecommerce penetration at only 0.9%.

Risks

Vroom has a history of losses and may not achieve or maintain profitability in the future. It may not be able to generate sufficient revenue to generate positive cash flow on a sustained basis, and their revenue growth rate may decline.

As a result of the impact of the COVID-19 pandemic, in combination with the history of losses and negative cash flows from operations and that the company has not yet obtained additional capital in connection with the offering, Vroom consolidated financial statements contain a statement regarding a substantial doubt about their ability to continue as a going concern.

Financials

Company’s ecommerce revenue grew at a 77.0% compound annual growth rate (“CAGR”) from 2016 to 2019, including year-over-year growth of 95.3% from 2018 to 2019. Company’s revenue over the last twelve months is $1.33B with quarterly revenue growth YoY of 60%.

Vroom has raised a total of $721M in funding over 8 rounds. The startup declined to disclose its valuation, but The Wall Street Journal reported the company was valued at $1.5 billion as of December 2019. Vroom has historically low gross margins of around 5%. It is still unclear how the company is going to reach profitability. As of April 2020, Vroom had $156 million in cash and cash equivalents.

The expected return on investment is moderate (up to 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
05 Jun
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
09 Jun
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
09 June
Return forecast
Moderate (up to 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
14 Sep
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. Moreover, you may call them on +7 495 646-15-57 or 8 800 333-66-81 or visit our office, if a more detailed discussion is needed.

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 Vroom

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

View more ideas