Vroom completed the previously announced wind-down of its eCommerce and used vehicle dealership businesses.
The company ended transactions through vroom.com, completed previously contracted transactions, sold “substantially all” of its used vehicle inventory and paid off a vehicle floorplan financing facility, Vroom said in a Thursday (April 4) filing with the Securities and Exchange Commission.
The company’s other businesses — United Auto Credit Corp. (UACC) and CarStory — are not affected by this wind-down and continue to serve their third-party customers, according to the filing.
UACC offers vehicle financing through third-party dealers, while CarStory provides an artificial intelligence-powered analytics and digital services platform for automotive retailers, the filing said.
Vroom announced Jan. 22 that it had begun to wind down the eCommerce and used vehicle dealership businesses.
The move came after the company tried to raise additional capital and extend its vehicle floorplan facility past its expiration date of March 31, but was unable to do so, Vroom CEO Tom Shortt said at the time.
Vroom also said it planned to lay off 800 employees, amounting to 90% of those not engaged with UACC or CarStory.
Robert Mylod, independent executive chair of the board, said at the time that Vroom was “committed to responsibly managing our remaining businesses and prudently deploying our capital as we seek to maximize value for all of our stakeholders.”
When reporting the company’s fourth-quarter results March 13, Shortt said the wind-down was proceeding in an orderly, timely and cost-effective manner.
“We anticipate that the wind-down will be substantially complete by the end of the month and look forward to working to maximize stakeholder value through our remaining businesses, United Auto Credit and CarStory,” Shortt said at the time.
Online platforms focused on car buying and financing have faced a rough patch over the past several months, as potential buyers encountered prices that were out of reach and loans that were expensive and difficult to get.
Delinquencies have been on the rise for those who did purchase a vehicle.
To weather the storm and entice more buyers, digital automotive platforms have been enhancing features and implementing cost-cutting measures.
Companies are prioritizing digital transformation within business strategies, resilience against economic fluctuations and sustainable growth.
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