Overview

Product Description

Beepi was a Mountain View, California company offering an online peer-to-peer marketplace for buying, selling and leasing used cars, where transactions could be carried out entirely with a smart phone or a PC. Cars underwent an inspection and were listed on Beepi's website for a fixed sales price, with Beepi taking up to a 9% commission and buying unsold cars after 30 days.

Quick Stats

2013

Started in

Jan, 2017

Closed in

51-200

Employee (s)

$148,950,000

Total Raised

Why did Beepi fail?

Follow This Question - 1

Evan Lee

Updated on 22 Jul, 2017

Burn Rate

Overfunding

After its demise, Beepi was pegged as a classic example of "good idea, bad execution". The used car marketplace had its peak of 300 employees and&nbsp;<a href="http://www.sramanamitra.com/2017/03/07/death-by-overfunding-beepi-towed-off-market/">$350 million GMV</a> (gross merchandise value) with $31.5 million revenue in 2015.&nbsp;However, Beepi's high burn rate&nbsp;and lack of fiscal discipline were some of the main contributors that caused the company to falter the next year. While a majority of Beepi's burn went to "grossly high salaries" and overtime, the leadership also mismanaged funds. <a href="https://techcrunch.com/2017/02/16/car-startup-beepi-sold-for-parts-after-potential-exits-to-fair-and-then-dgdg-broke-down/">TechCrunch</a> reported that the founders spent $10,000 for an executive office couch and also spent funds paying their significant others' car and cell phone expenses. “There was a definite abuse of funds,” an ex-employee said.&nbsp;That employee also described the founders as "very hands on" and who would micro-manage decisions. They were also allegedly “very mercurial and hard to predict.”Beepi also faced some administrative issues, as the company would sometimes be late in getting new titles and plates sent to a buyer. There were several cases where buyers were pulled over for having expired temporary registrations.Another issue stemmed from Beepi's massive funding (or "overfunding" as some call it)– they may have raised too much, too soon. One person commented that, “they were running the business to raise money, and then to get someone else to take it on”. An investor also thought that they were "too aggressive" in pushing for higher valuations.“Entrepreneurs should not always be raising at too high a price because it sets you up for a failure,” the investor continued.After funding for late stage startups cooled off in 2016, Beepi struggled to find more investors. As a result, the company ultimately had to sell itself for parts to pay off creditors.

1 Upvote

Olivier Raimbault

Answered on 12 Dec, 2018

Multiple reasons

What about the business&nbsp;model? It was not sustainable, for many reasons :<ul><li>So much operational, with unexpected events on many cars when it comes to move them</li><li>Ordering a used car online, even with a free trial period, is too involving in buyers' minds: a deposit to pay before the delivery, planning the delivery, planning a potential return, reimbursement etc.</li><li>Trust: buyers need to know the brand, which costs a massive budget in communication when it comes to a used cars dealership, especially&nbsp;in the US</li><li>Choosing a used car is "an entertainment": visiting a dealership in the weekend, touching the car, smelling the showroom...</li><li>A large part of the used cars sales are "unplanned": you visit a dealership to try a car you've seen online, but you buy another one nearby, thanks to "love at the first sight' during the visit. It was impossible&nbsp;on Beepi</li><li>Selling used cars is&nbsp;a proximity business: people need to know they can go back to the dealership in a few minutes in case of problem. It's psychological, even a strong guarantee across the carmaker's network is not enough&nbsp;</li><li>The promise of buying the car after 30 days if no buyer is found was too dangerous: the used cars market is too volatile. A facelift, a new model proposed by the carmaker... can highly decrease the price overnight&nbsp;</li></ul>I am surprised so many people describe the troubles in the way of managing Beepi, not focusing on the sustainability of the model... Olivier

0 Upvotes

Investors - 35

Funding Rounds - 6

Seed - $1,250,000

Series A - $5,000,000

Series B - $70,000,000

Series B - $12,700,000

Series B - $60,000,000

Unknown - Unknown Amount

Founders

Ale Resnik

Owen Savir

Share This Startup

Top Contributors

Evan Lee

Beepi

2013

Started in

Jan, 2017

Closed in

51-200

Employee (s)

$148,950,000

Total Raised

Why did Beepi fail?

Evan Lee

Updated on 22 Jul, 2017

Olivier Raimbault

Answered on 12 Dec, 2018

Alec Oxenford

AngelList

Brett Rochkind

Brian Sharples

Capital Invent

Comerica Bank

Daniel Curran

Dan Rose

DST Global

Employee Stock Option Fund (ESO Fund)

Fabrice Grinda

Flight Ventures

Foundation Capital

Gil Penchina

H. Barton Co-Invest Fund

Jeff Brody

Jose Marin

Marco Valta

Nurzhas Makishev

Philippe Suchet

Rahul Mehta

Red Point

Richard Boyle

Rough Draft Ventures

SAIC Capital

Scooter Braun

Scott Bommer

Sherpa Capital

Shervin Pishevar

Silicon Valley Bank

TA Ventures

Teodoro D'Ambrosio

Tina Sharkey

TMG Capital

Yuri Milner

Seed - $1,250,000

Alec Oxenford

Fabrice Grinda

Jose Marin

Marco Valta

Rough Draft Ventures

TA Ventures

Teodoro D'Ambrosio

Series A - $5,000,000

Brian Sharples

Fabrice Grinda

Jeff Brody

Red Point

Silicon Valley Bank

Tina Sharkey

Series B - $70,000,000

AngelList

Capital Invent

DST Global

Dan Rose

Fabrice Grinda

Flight Ventures

Foundation Capital

H. Barton Co-Invest Fund

Rahul Mehta

Red Point

SAIC Capital

Scooter Braun

Sherpa Capital

TMG Capital

Yuri Milner