Seattle Startup Joydrive expands into 14 states after raising $1.1 million in May
Joydrive, a startup disrupting the car-buying process with its online vehicle marketplace, raised $1.1 million last month alone and is now live in 14 states.
Buying a car used to entail spending hours on end at different car dealerships, talking to overly eager dealers and taking the vehicle for only a couple of test-drives, until the Seattle-based startup revolutionized it.
The company, which was founded in 2016, works with more than 140 traditional dealerships, operating as an intermediary between them and prospective buyers.
Joydrive currently offers over 30,000 vehicles, both used and new, to customers who can pick a car from the convenience of their homes, have it delivered to their front door, test it for five days and return it if they aren’t satisfied with it.
Hunter Gorham, the company CEO who came up with this business model a few years ago, says dealerships are catching onto this new trend and are joining his company in order to cater to a growing number of eCommerce-oriented modern consumers.
The fact that less than 1% of shoppers have taken advantage of Joydrive’s 5-day return policy instills confidence in the service.
The 15-person startup has raised a total of $10 million in funds since it was established. The last round of funding, which started in February, brought a $5.7 million influx of cash, including the $1.1 million secured in May.
What’s interesting is that the financing isn’t coming from traditional venture capitalists but from brick-and-mortar car dealerships who are not afraid of the shift in the industry. “These strategic dealers are industry influencers uniting together to lead the change in auto sales,” said Joydrive CEO Hunter Gorham to GeekWire.
Even though Joydrive is among the pioneers who are laying the groundwork for moving the experience of purchasing or leasing a car online, it is not alone in this endeavor. Other startups, like Carvana, Vroom, Shift, and Tred are creating online marketplaces of their own.
The fact that Shift, a startup with a business model similar to Joydrive’s, has brought in $135 million in revenue last year is an indicator of how well shoppers are responding to this trend. These startups go above and beyond to make the car-purchasing experience as simple and as transparent as possible and the consumers appreciate it.
With haggling out of the picture and information about the vehicles on offer readily available on these companies’ websites, more and more shoppers are migrating to online auto marketplaces.
Gorham says the reason behind starting up Joydrive was simplifying a process that was unnecessarily complicated and that required shoppers to keep an eye out for scams. “I couldn’t send my own mom in to buy a car unless I went and protected and guarded her every step of the way,” he told GeekWire. “Joydrive hopes to change that.”