New Startup Revolutionizes Car Selling by Letting Dealerships Compete for Your Used Vehicle

Selling a vehicle can be quite challenging. While opting for services like Carvana may offer convenience, it may also lead to offers thousands of dollars lower than the car’s actual value. On the other hand, selling to a dealership could yield better results, but the offers can vary greatly based on the dealership’s needs, along with requiring more of your time and effort.

A startup based in Los Angeles, known as Bidbus, has been working over the past few years to streamline this process, allowing sellers to receive competitive offers from dealerships without leaving their homes. The company has developed a digital platform where multiple auto dealers can place bids on a vehicle. According to Bidbus’ founders, this approach results in offers that are typically $2,000 to $3,000 more than those from Carvana.

In a move to expand beyond its primary markets of California and Texas, Bidbus has successfully raised $15 million in a Series A funding round, spearheaded by Ibex Investors. The round also saw contributions from several other investors, including Mucker Capital and FJ Labs.

Bidbus co-founder and CEO Duke Yan shared in an exclusive interview that his inspiration for the platform originated from his own experiences buying and selling cars. After encountering disappointingly low offers while assisting his mother in selling her vehicle, he created a group chat where buyers began to drive up the price through bidding.

“The issue of used-car affordability isn’t about financing; it’s about market efficiency. Consumers often lack clear pricing for trade-ins, dealers have difficulty sourcing good inventory, and the best cars frequently remain in private driveways,” Yan explained.

Bidbus cleverly bridges this gap. Dealerships typically acquire cars through auctions to stock their lots, making the idea of Bidbus a familiar one. Yan noted that Bidbus assists dealers by connecting them with high-value vehicles that private sellers possess, benefiting from the price difference between what sellers are willing to accept and the higher amounts that dealers usually pay.

However, enhancing sellers’ profits is just part of Yan’s vision. He aims to make the selling experience enjoyable as well, drawing inspiration from stock-trading apps like Robinhood and social media platforms such as TikTok.

Once a vehicle is listed on the platform, dealers are given only a few hours to submit their bids, which are displayed in real-time with large fonts showing the offers. Yan encourages users to share screenshots or videos of the bidding activity to promote the app and attract more sellers.

“Our goal is to make car selling as transparent and competitive as stock trading, where prices are determined by market dynamics instead of a single buyer,” he stated.

Growing the Bidbus platform hasn’t been without its challenges. Initially bootstrapped, Yan acknowledged that while there was some early success, one of the largest dealers had to be banned due to unfair practices.

“That dealer was the only one purchasing a significant number of cars at the time, and he felt entitled to haggle aggressively,” Yan recounted. “It was a tough decision, but in the long run, it improved our platform. Now, we have similar dealers who maintain the quality experience we aim to provide our users.”

Jeff Peters from Ibex, who led the recent funding round, initially held back from investing during Bidbus’ seed round due to its limited operations in Los Angeles. However, as the company began to expand into new regions and engage dealership groups like Lithia Motors, he became eager to invest.

“The scalability of this model is evident, and it represents a problem and opportunity found universally across the United States. Marketplace business models tend to endure, and I believe this will be no different,” Peters remarked.

“Ultimately, they are adding value by providing sellers with $2,000 to $3,000 more for their cars and enabling dealers to acquire inventory they previously couldn’t access.”

So far, Bidbus has facilitated the sale of around 10,000 vehicles through its platform. Peters sees significant potential moving forward. The success of Carvana has demonstrated that selling a car online can be quick and straightforward, and he believes that as consumers become more accustomed to this process, they will actively seek the best deals available.