The Ledger
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Used car demand will jump over the next two quarters
“So my hunch is that demand for used cars over the next couple of quarters is going to jump because of everything that's kind of going on.”
Arison: Used car demand will jump as consumers avoid rideshare
“And my guess is that people are also going to try to avoid transportation and avoid ride sharing, right? So my hunch is that demand for used cars over the next couple of quarters is going to jump because of everything that's kind of going on.”
Arison: Shift's pre-IPO unit economics are much stronger than Carvana's were
“Our unit economics generally have been a lot stronger than theirs were prior to IPO.”
Arison: Market will see 60-to-90-day fundraising freeze from COVID
“I think in practice, there's going to be a bunker mentality out there for 60 to 90 days. And so nothing's going to happen. And I think we all need to bunker down and kind of get ready for that.”
Arison: Online Auto Retailers Can Credibly IPO at 15,000 Annual Car Sales
“I think what really matters is volume. Like once you're past 15,000 cars a year, I think it's credible to go out public. At least based on what I'm hearing from investors, right? I've spent a lot of time with public market investors, and that's kind of their g…”
Shift's unit economics are much stronger than Carvana's were pre-IPO
“Our unit economics generally have been a lot stronger than theirs were prior to IPO.”
Shift targets a potential 2021 IPO based on revenue projections
“Because if we do the revenue and the volume that we're projecting, we'd be in fairly good shape to go public next year. Now, again, who knows what happens and things might get delayed and change and whatnot.”
Shift sees twice as much demand for sub-$12k used cars
“You would be surprised, but the twice as much demand is for the happens for those cars. That's where everything else even though they're older.”
Top US car retailers hold less than 1% of the overall market
“The largest car seller that sells new, new and used sells about a million cars a year. I, AutoNation. So like, and then CarMax is a used car only seller, also does about seven and 50,000 used, right? So the largest players have like sub one percent of the mark…”
Captive auto lending requires $100M in quarterly securitization
“Until you're doing about a hundred million dollars of securitization every quarter, it's too expensive to do your own loans.”
Arison: Carvana averaged 120 days to sell inventory at IPO
“When they went public, I think it were at a 120 days.”
Arison: VC market will face a 60-to-90 day fundraising freeze
“I think in practice, there's going to be a bunker mentality out there for 60 to 90 days. And so nothing's going to happen.”
Arison: Companies should avoid captive lending in weak economies
“That's actually another reason not to be doing capital lending right now is because when the economy's weaker, you don't want to be doing your own loans because you just don't know what's going to happen.”
Online auto retailers become IPO-ready at 15,000 cars sold annually
“I think what really matters is volume. Like once you're past 15,000 cars a year, I think it's credible to go out public. At least based on what I'm hearing from investors, right? I've spent a lot of time with public market investors, and that's kind of their g…”
Arison: Shift sees twice the demand for sub-$12k cars
“And we have a segment in our business that we call Value Auto. So these are cars that are below 12,000 dollars in price and over 80,000 miles on them. They're actually very, very popular. You would be surprised, but the twice as much demand is for the happens …”
Arison: Captive auto lending requires $100M in quarterly securitizations to be viable
“But what you learn over time is that until you're doing about a hundred million dollars of securitization every quarter it's too expensive to do your own loans.”
Arison: Carvana held inventory for 120 days at IPO
“I don't know what Carvana's read right now, but when they went public, I think it were at a 120 days. It was definitely, definitely shorter than their IPO”
Shift sells up to 12-year-old cars whereas Vroom caps at four
“When you look at our inventory we have cars that are anywhere from zero to you know, 12 years in age, whereas Vroom only has cars that are roughly, you know, zero to four years in age because if there's no test drive involved, it's kind of hard to convince som…”
Shift: Value Auto inventory represents 20% to 30% of sales
“And that was a pretty big part of our business is about 20 to 25 to 30% of our business.”
Arison: Shift sold 11,500 cars in 2019
“And if you could take our Cager in terms of volume, and we finished last year with 11,500 cars.”
Arison: Shift has served 60,000 lifetime buyers and sellers
“We've serviced about 60,000 customers in the life of the company on both the sell side and the buy side.”
Shift's average vehicle selling price ranges between $15,000 and $17,000
“Our average price ranges by time of year and kind of how we manage the inventory, but somewhere between 15 and 17,000 dollars.”
Arison: Shift Will Launch Captive Lending by 2024 or 2025
“So eventually, you know, out in 20, 24, 25, we will do capital loans, but we just need to grow to be large enough before we can do that.”
Arison: Shift has raised $225M in equity and $75M in debt
“We raised about two hundred twenty five million in equity and seven family in debt.”
Shift's inventory turns over in 30 to 55 days
“It varies between low and fit, 30 days, high end, 55 days.”
Arison: Shift Targets 60/40 Revenue Mix from Cars Versus Financing Products
“We are trying to probably trying to get to a place where 60% of our revenue comes from the cars and 40% comes from loans and warranties over the next 1824 months.”
Arison: Shift Made $10M to $15M in Loan and Warranty Revenue Last Year
“No, we made probably, like, 10, maybe fifteen million in loan and warranty last year.”
Arison: Value Auto makes up 25% to 30% of Shift's business
“Now it's a pretty big part of our business. It's about 20 to 25 to 30% of our business.”
Arison: Shift grew 30% to 50% annually, sold 11,500 cars in 2019
“Overall we've grown roughly 30 to 50% every year we've been around. And if you could take our Cager in terms of volume, and we finished last year with 11,500 cars.”
Carvana sold 17,000 cars and generated $300M the year before IPO
“Carvana, which is a public company, they've been public for about three years now. They got started out of a larger dealership chain, kind of as a digital play. So they went public in 2017. In 2016, they did about 17,000 cars. And about three hundred million i…”
Arison: 45 million used cars worth $750B will sell in US in 2020
“Forty-five million used cars are going to be sold in the US this year. Yeah, it's about 750 billion dollars in used and another six hundred million in new.”
Arison: Largest US auto retailers hold sub-1% total market share
“So the largest car seller that sells new, new and used sells about a million cars a year. AutoNation. So like, and then CarMax is a used car only seller, also does about seven and 50,000 used, right? So the largest players have like sub one percent of the mark…”
Arison: 65% of Shift buyers finance versus 80% at traditional dealerships
“Yeah, so we, 65% do financing, but that's actually low compared to a traditional dealer. Ok. A traditional dealer, that number's closer to 80%.”
Arison: Shift's car inventory turnaround takes 30 to 55 days
“It varies between low and fit, 30 days, high end, 55 days. It depends on the type of inventory we're dealing with. More expensive cars take longer to sell.”
Shift targets 40% revenue from financing and warranties in 2 years
“But I think, like, we are trying to, probably trying to get to a place where 60% of our revenue comes from the cars and 40% comes from loans and warranties over the next 1824 months.”
Arison: Shift Made $10M–$15M From Loans and Warranties in 2019
“No, we made probably, like, 10, maybe fifteen million in loan and warranty last year.”
Shift splits upside above guaranteed minimum price with car sellers
“We agreed to a guaranteed minimum price with the seller, which is usually you know, way above the trading price, but below the price that we're selling the car for. And then when the car is sold for a price above the minimum, the difference between the minimum…”
Shift charges car buyers a one-time fee between $195 and $495
“So the buyer also pays a fee for using the shift service. And then lastly, you know it depends on the kind of car they're buying and the price of the car. So it ranges from one 95 to four 95, depending on the value of the car.”
Shift raised a $24 million Series A and $50 million Series B
“Series A was 24, and Series B was 50.”
Shift slowed 20% MoM growth to 10% to balance unit economics
“Well, so in 2015, we were growing roughly 20% month over month sometimes faster and, you know, first quarter of this year, likewise, we were growing about 20, 30% month over month. Now we slow down to the roughly, you know ten-inch percent month-for-month in o…”
Taxi Magic booked 10% of taxi rides in SF, Chicago, and Dallas
“We, you know, I helped start Taxi Magic, and we grew up a very large business in some ways there as well, like we were booking, you know, 10% of all taxi rides in San Francisco, Chicago, Dallas a bunch of other cities, and, you know, we really created that spa…”
Shift operates vehicle pickups in California and Oregon, shipping nationwide
“That's available in all of California and all of Oregon. And then if you want to buy a car, you have three ways to buy a car. You can either have a test drive be brought to you at your house or your office or you can come to our warehouse to look around, kind …”
Carvana sold 17,000 cars and generated roughly $300M in 2016
“In 2016, they did about 17,000 cars. And about three hundred million in revenue.”
Arison: 45 million used cars worth $750B to be sold in US in 2020
“Forty-five million used cars are going to be sold in the U.S. This year. Yeah, it's about 750 billion dollars in used and another six hundred million in new.”
George Arison says he would pay $5,000 per year for LinkedIn
“Oh, I don't think I could function without LinkedIn. I say this a lot, actually, like, I don't know how people founded companies before LinkedIn existed, because I go to it, like, so often. Literally, you know, I pay, what, a thousand bucks for a year? If they…”