For any relatively young tech company looking to continue spreading its wings from coast to coast, milestones can be huge.
And Buffalo, N.Y.-based ACV Auctions — which has its sights set on taking its rapidly expanding marketplace to California by year’s end — hit a few this spring.
On the last day of May, there were 450 vehicles sold through ACV, breaking a record for the online auction platform, according to the company.
That was part of some 7,000 transactions on ACV during May, up from 6,000 a month earlier and 5,000 in March.
Put another way, ACV sold more than $50 million in inventory in May.
The company, which was the $1 million winner of the 43North startup competition in 2015, also had 3,000 unique bidders in May, ACV chief executive George Chamoun said in an early June phone interview.
“That’s a lot of people that now trust ACV,” he said. “And that number is growing by hundreds every month.”
That element of trust plays a big role in the company’s growth. When asked about the factors driving the sales increases, Chamoun said: “What happened is, when you have enough trust in the ecosystem among buyers and sellers, as a platform, you become adopted more and more. It’s like anything in life; the more you can trust it, the more you want to use it.”
Consider the example of Amazon, he said, which of course, is frequently used by many consumers today.
“We didn’t buy things on Amazon as frequently a few years ago. But we trust that it’s going to arrive, we trust that the pricing’s fair, we trust that it all works,” Chamoun said. “And, really, I think what’s happening, broadly, is both sellers and buyers have increasing trust because of the results we’ve been delivering, which have been great results for both sellers and buyers.”
Of great importance to fostering that trust are condition reports. Those have been improving at ACV, Chamoun said, and include more than 40 photos, paint meter reading, tire depth readings and more.
“When they buy a car on ACV, they know what they’re getting. But before you buy your first car, you’re not sure what it’s going to be like. It’s like anything; before we do it for the first time, we’re a little unsure, we’re a little uncertain.”
Chamoun has found that once buyers go through the process on ACV, they tend to be impressed, so getting the first-time buyer “over that hump” has been key for the company.
And naturally, it also takes time for a new technology or platform to gain an audience beyond its early adopters.
Update on coast-to-coast expansion
In February, ACV announced a $31 million round of Series C venture funding that would allow the online auto auction to double its footprint and expand coast-to-coast by year’s end.
As of early June, ACV had set up shop from Maine to Florida, and spread as far as Chicago and Texas, Chamoun said. The company had hired territory managers in 58 territories and plans to end the year with its footprint reaching more than 70 territories and expansion having reached California, Chamoun said.
And then, ACV wants to continue hiring into next year, he said.
At the time of the interview, ACV was eight markets ahead of its target pace, he said.
Price range expansion
It’s not just the geographic footprint that ACV is expanding. The scope of inventory that sells on the platform has, as well.
In May, the average transaction price hit $7,000 for the first time, Chamoun said, up from around $4,000 when he arrived two years ago.
“But we never stopped selling the $500 car,” Chamoun said.
In fact, ACV sells in every price bracket from the $500 car to the $240,000 ride, he said.