Car marketplace Vroom files for IPO
Vroom, a New York City-based online marketplace for used cars, has filed to go public on the Nasdaq under the ticket symbol "VRM."
Why it matters: Vroom's move comes at a time when many other tech companies are holding off on their big public market debut.
Financials: The company is not profitable. For the year ended Dec. 31, 2019, it saw a net loss of $142.8 million on $1.2 billion in total revenue. The previous year, Vroom had a net loss of $84.95 million on $855.4 million in revenue.
Impact from COVID-19:
- Between March 11 and March 31, Vroom saw a 15% decrease in total e-commerce revenue because of lower consumer demand compared to the 20 days prior.
- Due to inventory price reductions that began in late March, the company says customer demand returned to pre-COVID-19 levels, though sales were at a greatly reduced gross profit per unit. On April 20, the company began acquiring new inventory from both auctions and consumers, with a focus on high-demand models.
- As of May 3, about one-third of Vroom's workforce has been furloughed, and it has also instituted salary reduction for non-furloughed salaried employees.
The big picture: As regions begin to ease coronavirus restrictions, some experts predict an uptick in personal car usage amid ongoing concerns about taking public transit and ride-hailing services.