Car resale startup CarLotz goes public with plans to expand
Following a pattern of growth and profitability that began a decade ago, Richmond-based CarLotz will become a public traded company as it works to grow and scale.
The car resale startup operates nationwide with offices in several states and plans open new hubs in multiple locations over the next few years, CarLotz Chief Executive Officer Michael Bor said.
The October 22 announcement that CarLotz will become a publicly traded company came after finalizing a merger agreement with Acamar Partners Acquisition Corp. Acamar is currently traded under the ticker symbol ACAM. When the transaction is complete, CarLotz will be the surviving entity and trade under the symbol LOTZ, Bor said.
Investors can begin purchasing shares now that will convert officially to CarLotz when the deal closes by the end of the year.
“From the beginning, when we launched, we’ve always raised money, grown into profitability and raised money again,” Bor said. “We’re at a size now where a more dramatic increase in scale makes sense to us.”
He said that the agreement was attractive because it allows CarLotz to plan for growth into place while adding several other key elements. These include the addition of institutional investors, creating a more formal board of advisors and bringing in experts in the consumer retail business.
The CarLotz growth plan targets three-to-four new hubs per quarter over the next several years in major geographies in the United States, including the Pacific Northwest, the Southeast, and New England, Bor said.
They expect to open larger facilities that will enable them to process more vehicles and perform onsite reconditioning
“We know how to get these hubs open. We opened three in 2018. We’ve built a playbook for it, and we have the inventory for the hubs,” he said. “It’s just a matter of continuing to source this inventory and sell it through our platform.”
CarLotz focuses on taking the pain out of buying and selling used cars by operating a consignment, non-commission sales model.
Bor said when he and cofounders Aaron Montgomery and Will Boland started the company in Richmond in 2010, they found tremendous resources for their talent and capital needs.
The concept for the startup came to Bor as he was driving home from his job in downtown Richmond and noticed a multitude of cars lined up on Grove Avenue with “for sale by owner” signs. He thought it seemed like a poor way to sell cars.
“I was seeing this thing happening, and it just didn’t seem like the most efficient way to do it. It’s a big transaction. It should be an enjoyable process,” he said. “A lot of people, more and more, are getting comfortable with buying vehicles online.”
Written by Ellen Quick