CarGurus recently announced they will be expanding their service internationally and going public. I’ve been asked by colleagues and the press for my thoughts and here are three reasons why I couldn’t be more excited.
- Finally! Automotive gets to have its share of the public markets. AutoTrader and Cars.com have been operating profitably for over 15 years, but are still closely held private companies (Cox Enterprises, Inc. owns AutoTrader and Gannett owns Cars.com).
- All automotive marketplaces will benefit. As the Founder of Mojo Motors I’m thrilled our category will get attention the other major verticals (real estate, travel, jobs) have enjoyed for years through multiple IPOs.
- International expansion is a bold move. The challenges are significant and margin for error is very thin. CarGurus’ strategy to go public, then use proceeds and/or stock to acquire existing players is a great idea with some historical evidence. This is how eBay successfully and quickly expanded internationally in the early to mid 2000’s. This same strategy can work in the automotive space, as well.
As 2014 begins making way for 2015, here’s a recap of some of the developments in automotive tech.
- January 2, 2014 – Cox Enterprises increases stake in AutoTrader to 98%
- January 21, 2014 – CarWoo shuts down after $16M in funding
- May 16, 2014 – TrueCar goes public and trades at $9 a share
- August 4, 2014 – Gannet buys Cars.com for $1.8B
- October 11, 2014 – CarGurus announces they are going international and public
Expect the automotive marketplace shakeups to continue in 2015 and beyond…
Written by Paul Nadjarian
Paul is the Founder and CEO of Mojo Motors, an automotive classified website where shoppers Follow cars to get alerts when dealers drop prices.