Beepi, the business of selling used cars

In the startup environment, it is a habit to talk about successes to keep our hopes alive for the future, but it is a big mistake to forget the failures of the past and not benefit from the experiences of the past. For this purpose, the Ecomotive team has collected the experiences of a series of failed startups, so that reviewing their failed stories may be a basis for the success of new startups in Iran’s startup community. This collection will be published and made available to the audience in the form of the story of failure. We review the fifth part of this series, which deals with the failure of the Beepi startup.

Beepi was formed in April 2014 by Alejandro Resnick as CEO and Avon Sawyer as COO. This idea after the bad experience of buying a used car when I was a student M.I.T It came to Resnik’s mind. The service first received a $5 million Series A investment in the tech industry, followed by a $60 million Series B round in October 2014 at a $200 million valuation. This was while its annual income was estimated to be 15 million dollars.

Beepi, which was initially only active in San Francisco, has also reached San Diego. In December 2014, it received another $12.7 million from three investors to buy out the shares of early small investors.

The company’s first offices outside of California opened in April 2015 in Phoenix. Although Beepi services were available in 200 cities, car delivery was free only in California and Arizona. In an interview with The Wall Street Journal in May, Resnick said he expected $300 million in additional capital at a valuation of more than $2 billion. In October 2016, Beepi led by the largest domestic car manufacturer in China; that’s mean Motorcycle bike, had only 70 million dollars increase in capital attraction, which its CEO attributed this shortfall to the market turmoil. In the fall of 2016, Beepi was selling just 153 cars per month in California, while the largest used car dealer at the time was averaging 8,500 sales per month.

Although Beepi in December 2015, partnership with Alay Financial started, but this decision did not work and a year later in December 2016, when the Chinese investor withdrew from the proposed investment, Beepi was forced to stop its activities outside of California and found itself with its competitor, shift sold. This company, by firing 180 of its employees, following the merger with a new company named firedotcom Was. This merger also fell through in February 2017, and Beepi sold its assets in a winding-up process. Sale of assets by the company Sherwood And it took place in a process known as handing over for the benefit of creditors. In fact, the said company was selling Beepi’s assets to repay the creditors’ capital.

Beepi is a good example of “good idea, bad execution”. Negative cash flow, financial disorder, mismanagement of attracted capital, having wrong priorities, insisting on increasing capital in a short time, large amount of employees and their high salaries were among the factors that led to Beepi’s downfall; According to a former employee of the company, Beepi was wasting up to $7 million a month at its peak with 300 employees. single crunch In a strange report, he announced the purchase of a $10,000 sofa for the company’s executive director’s office. Add to these expenses the high expenses of the managers’ car and cell phone. In addition, some administrative issues also caused problems for Beepi, because in some cases the buyers’ registration expired due to the company’s delay in sending the necessary documents, leading to their withdrawal and withdrawal.

In the coming days, we will share more startup failure stories with you. Failures that the right look at them can provide the basis for our success!