Shift Technologies Chief Executive George Arison
Investors have put more than $23 million into Shift Technologies Inc., a used car marketplace that is racing Beepi Inc. and others to disrupt the multibillion-dollar sector.
Founded less than a year ago, Shift co-founders see the same market opportunity that prompted Sherpa Ventures and other Beepi investors to plow $60 million into that startup last month.
The premise is that used car shopping–be it via dealerships or direct to sellers–is unpleasant, inefficient and woefully in need of a technological overhaul.
“It’s a huge market that we see the ability to rethink and rebuild,” said Draper Fisher Jurvetson Partner Emily Melton, who co-led the company’s Series A round.
Ms. Melton said she was most excited about the large opportunity Shift is attacking, which she compared to previous DFJ investments like Redfin for home buying and SpaceX for space travel.
Like Beepi, Shift allows people to buy or sell used cars from their phones. Unlike Beepi, which emphasizes the integrity of its car reviews to eliminate the need for test drives, Shift includes test drives.
Shift employs “car enthusiasts” who function as car concierges. They schedule “instant test drives” with potential buyers and bring cars to them personally. They also meet with sellers to establish a price guarantee and then take the vehicle to a Shift warehouse to be evaluated by mechanics, detailed, photographed and posted for sale across sites including AutoTrader.com, Car.com and CarGurus.com and as well as Shift’s own site, Driveshift.com.
Shift splits the difference between the guarantee price and the final sale price with the car owner.
“Our interests are aligned. If we can get a better price then we will,” Shift co-founder and Chief Executive George Arison said.
Mr. Arison said the startup also generates revenue through add-on services like financing and warrantees and plans to expand those products in coming months.
He said he will also use the funding to hire more employees, particularly engineers, and expand the team from 20 to 60 or so within the next six months.
Expanding the San Francisco and Los Angeles markets and ultimately opening new regions is also planned.
“We think we can 10x the business over the next six to nine months,” Mr. Arrison said.
DFJ and Highland Capital Partners co-led the $20 million Series A round with participation from SV Angel, Great Oaks VC and individuals including GoogleMaps co-creator Lars Rasmussen, Meraki Networks Inc. founder Hans Robertson, Square Inc. co-founder Jim McKelvey and Shazam Ltd. founder Chris Barton.
DFJ’s Ms. Melton and Highland Capital Partner Manish Patel join the Shift board.
Valuation was north of $60 million.
Shift raised a $3.75 million seed round that was previously undisclosed.
Write to Lizette Chapman at email@example.com. Follow her on Twitter at@zettewil