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Selling a car is a pain. You can take the easy route and use services like Carvana, but you may wind up with thousands of dollars less than your car is worth. Or, you could hope for more by going to a dealership, but the dealer\u2019s offer can vary wildly depending on what they\u2019re<\/em> looking for, never mind the extra time and effort on your part.<\/p>\n A Los Angeles-based startup called Bidbus<\/a> has spent the last few years trying to combine the best of those options, making it so sellers don\u2019t need to leave their couch to get dealership-level offers. The company has created a digital marketplace where multiple dealers can bid on a car, a process that results in an average offer that\u2019s about $2,000 to $3,000 higher than what Carvana offers, according to Bidbus\u2019 founders.<\/p>\n Now, looking to scale beyond its initial markets of California and Texas, the startup has raised a $15 million Series A funding round led by early-stage mobility fund Ibex Investors. The round also saw participation from Mucker Capital, FJ Labs, Motley Fool Ventures, DataPoint Capital, Walter Ventures, and the Car Dealership Guy\u2019s Yossi Levi.<\/p>\n Bidbus\u2019 co-founder and CEO Duke Yan told TechCrunch in an exclusive interview that he came up with the idea after years spent buying and selling cars on his own. When he tried to help his mom get rid of her car, the offers from dealers were insultingly low, so he put them in a group chat. To his surprise, buyers started bidding up the price. <\/p>\n \u201cUsed-car affordability is not a financing problem. It\u2019s a market efficiency problem. Consumers lack real price discovery for trade-ins, dealers struggle to source quality inventory, and much of the best supply is still trapped in people\u2019s driveways,\u201d Yan told TechCrunch.<\/p>\n It\u2019s a clever combination. Dealerships already buy cars at auctions to fill inventory, so the startup is not pitching a foreign idea. Yan said Bidbus helps dealers by bringing them the most highly-valued used cars, which tend to come from private sellers. The startup takes advantage of the spread between what online sellers are willing to pay and the typically-higher dealer payout: a difference that can stretch to thousands of dollars.<\/p>\n But netting sellers more money, even after Bidbus takes a cut, wasn\u2019t enough for Yan. He also wants to make the experience fun, and has taken inspiration from stock trading apps like Robinhood and social media apps like TikTok.<\/p>\n Once a car is accepted on the platform, dealers only have a few hours to bid. Bidbus shows live bids with the corresponding offers displayed in big font. The expectation, Yan said, is for Bidbus users to share screenshots or videos of this activity to raise awareness of the app and draw in new potential sellers.<\/p>\n \u201cOur vision is to make selling a car as transparent and competitive as trading a stock, where price is determined by market competition rather than a single buyer,\u201d Yan said. <\/p>\n Growing Bidbus hasn\u2019t been easy, Yan said. The company was bootstrapped in the beginning, and while it got some early traction, he admitted he had to ban one of the platform\u2019s largest dealers.<\/p>\n \u201cAt that time, he was the only one that bought so many cars, and so he felt like he could get away with haggling or low-balling,\u201d Yan said. \u201cIt hurt at first, but now our platform is better than ever. We have five to eight more dealers like him, buying a lot, upholding the standard [experience] that we want our customers to go through.\u201d<\/p>\n Jeff Peters, the partner at Ibex who led the funding round, said he held back on investing in Bidbus\u2019 seed round mostly because the company was only operating in Los Angeles at the time. But once Bidbus started spreading to new markets, bringing on new customers, and signing dealership groups like Lithia Motors and Penske Automotive, Peters wanted in.<\/p>\n \u201cIt seems like this is scalable, and that it\u2019s a universal problem and a universal opportunity, at least across the United States. I think it\u2019s gonna be durable, too, because some of the most durable business models are marketplaces,\u201d he told TechCrunch. <\/p>\n \u201cAt the end of the day, they\u2019re providing value to consumers by giving them $2,000 to $3,000 more for their vehicle, as well as allowing dealers to build up their inventory and access new inventory that they never really had access to before.\u201d<\/p>\n Bidbus has so far helped people sell around 10,000 cars on its platform, and Peters said he sees a lot of upside. Carvana proved that selling a car online can be simple and quick, Peters said. Now that vehicle owners are used to that idea, \u201cI think people will be pretty much looking for the best deal, however they can find it,\u201d he added.<\/p>\n<\/div>\n When you purchase through links in our articles, we may earn a small commission<\/a>. This doesn\u2019t affect our editorial independence.<\/em><\/p>\n