Beepi, the US-based online vehicle marketplace that had raised about $150m in funding from investors including carmaker SAIC Motor, is set to wind down its business, the Wall Street Journal reported yesterday.
Founded in 2013, Beepi operated an online peer-to-peer marketplace for used cars. It had grown quickly and in September 2015 closed a $70m round led by China-based SAIC that valued it at $500m.
Despite approaching an annual run rate of almost $200m, the company’s burn rate was too rapid and in December 2016 it was forced to shut down its operations outside of its home state of California and agree a merger with stealth-mode competitor Fair.com.
The deal, which TechCrunch reported was due to SAIC deciding to exit the company, has now fallen through according to the WSJ, and TechCrunch reported today that a second planned purchase, by used car dealer DGDG, has also been cancelled.
Both prospective advisors had been offered a deal that would have involved them investing $20m in the company in return for a 35% stake. Advisory firm Sherwood Partners has now been employed to overseee the selling off of Beepi’s assets in a bid to pay its debts.
Beepi had originally planned to raise $300m at a $2bn valuation in the 2015 round, which included Foundation Capital, Sherpa Ventures and Redpoint Ventures, but CEO Ale Resnik told Fortune that figure was reduced due to “turmoil” in the venture capital market.
The company’s others shareholders include financial services firm Comerica Bank, investment firm DE Shaw, entrepreneur Yuri Milner and, according to Axios, IDG Ventures USA, the US venture capital affiliate of media firm International Data Group.
SAIC’s reported withdrawal does not however mean the company does not believe in the sector. It led a $29m series C round for China-based used car appraisal and e-commerce platform Che300 last week.