P2P used car online marketplace
Beepi was an online peer-to-peer marketplace for used cars. Beepi promised to make the transaction easy, safe and profitable for all parties. The company would take care of inspecting, processing and eventually delivering the cars to the customers themselves. Vroom, a similar business to Beepi, requires only photos before cars are listed, while Beepi sent an inspector for on the spot inspection. Great customer service was one of Beepi’s strengths.
It went out of cash to operate and tried to sell itself to two potential buyers, but the potential sales were not successful and Beepi had to close operation.
The company had an incredibly high burn rate, spending about $7 million per month. The reasons for cash shortage were attributed mismanagement of funds to support expenditures unrelated to business such as covering the bills for the founders’ partners and spendings unnecessary sums of money on expensive furnitures. At the same time, Beepi was also reported as giving disproportionately high salary and overtimes to its top management.
Besides having failed to manage the financial aspects of the startup, also Beepi’s logistics in buying and selling cars came short. Originally planning to complete an acquisition deal with Fair.com, one of its main competitors, that never happened and the company tried to negotiate with DGDG, but also this deal fell through. The company shut down in December 2016.
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