Still, those traditional players are both "expanding into the online channel and have launched online auctions in connection with their physical auctions," ACV acknowledged in its regulatory filing.
Indeed, Cox and KAR for several years have offered more digital sales capabilities and mobile wholesaling products. And the efforts were fine-tuned when both companies were forced to take sales completely online in the early months of the coronavirus pandemic. Both companies in the past have noted, for example, the benefits of having ample physical space for reconditioning even if fewer or no vehicles are running in their auction lanes.
During the same period, ACV has grown rapidly while also recording losses. Last year, it sold more than 391,000 wholesale vehicles.
CEO George Chamoun declined an interview with Automotive News last week.
Even before the pandemic caused a mass shift to digital operations, ACV quickly built volume. According to its regulatory filing, it sold 241,000 vehicles in 2019, up from 90,000 the year before. In 2015, shortly after it launched, the company sold only about 1,000 vehicles.
ACV's revenue nearly doubled last year to $208.4 million, but it recorded a net loss of $41.0 million. That was narrower than its $77.2 million loss the year before. ACV said it has incurred a net loss in every year since its inception.
Like rivals, ACV indicated in its filing that it views the U.S. used-vehicle market as massive and wide open to make competitive inroads. It estimates some 22 million used vehicles are sold at wholesale annually, generating about $230 billion in sales. Based on its average fee per vehicle of $494 last year, ACV said it sees a total addressable market opportunity of $10.7 billion for its core auction marketplace offering.
While noting that the "highly fragmented" used-vehicle market includes more than 50,000 independent and franchised retailers, ACV said the top 100 used-vehicle sellers make up less than 10 percent of the market. The country's largest used-vehicle retailer — not named in the filing but presumably CarMax — has just less than 2 percent of the market.
ACV's prospectus said the company sees "significant opportunities" to expand its dealership and commercial-partner customer base by applying targeted sales and marketing to its platform.
The company said it plans to roll out new data-powered products to create further efficiency in a "hyper digital world," while still complementing existing offerings.
Future growth could come from acquisitions and international expansion, with entry into Canada coming in 2022 or sooner, ACV said.
