The news: Online peer-to-peer marketplace Tred has raised $25 million in new funding to further expand its platform aimed at making the entire process around buying and selling used cars faster and easier.
The gist: Tred customers can arrange test drives, engage with sellers, pick up a car or have it delivered without having to visit a dealership. Tred’s services also help with such things as auto financing, vehicle protection, vehicle value reports, and fraud protection.
The journey: The startup launched as a 2012 Techstars Seattle graduate and was initially a service that partnered with dealerships and delivered cars to people’s homes for test drives and sales. The pivot to a different type of business started in 2015.
“If you look at marketplaces generally, they do take a little bit of time to develop because you need to create two different businesses, for your supply side and your demand side, which is difficult,” Feek said, adding that most of 2016 and 2017 was spent automating Tred’s processes.
The growth: Beyond Seattle, Tred now has locations in Los Angeles, Portland, San Francisco, Dallas, Houston, Austin, San Antonio, Miami, Tampa Bay, Orlando, and Jacksonville. And it just entered six new markets, including Denver, Phoenix, Salt Lake City, Indianapolis, Las Vegas, and Chicago.
The new cash will be used to expand products, locations, partnerships, and the company’s team of engineers. Tred employs about 30 people.
The backers: New and existing investors participated in the Series B round, including Vivek Raj at Geneses Investments; Nowlake Technologies led by Ian Anderson; and Paul Kerwin and Mike Kraus at CMFG Ventures. Tred has raised $37 million to date.
The industry: Tred competes with a number of other online car marketplaces including Carvana, Vroom, and Carvago.
The pandemic created a major shift in the way people shop, and car sales, which typically require a serious time and in-person commitment, are moving online, too. Tred is benefitting and Feek doesn’t think the trend will revert after the pandemic as people have become more comfortable buying more things digitally.
The supply shock affecting car dealers and parts manufacturers is also a boon for Tred, as delays have increased the competition for those who source cars from private sellers.
“We’ve been growing quite a bit in the last couple years,” Feek said, because of those two trends.
Last word: “We see a future where people are transacting cars much more regularly, every year or two, just using their phone instead of using the traditional Craigslist or dealership model every 10 years,” Feek said. “So we’re very excited about the future of the space and we’re really excited to go scale our model and hopefully be one of the major platforms that people use for it.”