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(UPDATED) Vroom to Acquire Texas Direct Auto

December 16, 2015

(Editor's Note: An earlier version of the story was posted while the acquisition was awaiting approval. The acquisition has since been approved by the Department of Justice, and the story has been updated accordingly.)

NEW YORK — Vroom announced today that it has agreed to acquire Texas Direct Auto (TDA). The acquisition, which will be funded through a $95 million Series C equity round and received approval from the Department of Justice on Wednesday, brings together one of the industry’s newest online retailers and the firm that pioneered online vehicle retailing.

According to officials, the two brands will co-exist and continue to operate online separately. Texas Direct, which is the No. 1 retailer on eBay Motors, is based in Houston, Texas. The combined company will be headquartered in New York and will employ 500 associates. It will also operate reconditioning and fulfillment facilities in Dallas, Houston and Indianapolis.

“Texas Direct Auto has led online car retailing and their team shares our business spirit of making buying and selling cars online the smartest and easiest way to transact, with an experience that is transparent and fun,” said Allon Bloch, CEO of Vroom, which was founded in 2013 by former AutoNation executives Marshall Chesrown and Kevin Westfall. “We have always admired Texas Direct Auto’s capabilities and we’re excited to partner with them, especially considering their groundbreaking, RFID-led automated reconditioning process.

“Their continued innovation has enabled the most technologically advanced used-car operation to grow to an enormous scale,” he added. “Now, with Vroom, this combined scale gives customers an expanded inventory of low-mileage, professionally reconditioned cars at great prices.”

Vroom is developing an online car-buying experience that caters to today’s Internet shopper. It offers a seven-day money-back guarantee, a no-questions-asked return policy, a 90-day bumper-to-bumper warranty, free nationwide shipping and pricing that is 7% below the market rate. By leveraging big data, Vroom provides customers with cash offers to purchase their cars sight unseen in less than five minutes.

“Joining forces with Vroom is a natural way for us to continue to grow Texas Direct Auto — both brands and companies will be run as separate entities and will leverage each other’s strengths,” said Rick Williams, co-founder of Texas Direct Auto. “We’re confident that this move will help us continue to be at the forefront of transforming the automotive industry.”

Texas Direct co-founder Mike Welch added: “We’re tremendously excited to be a part of the team at Vroom, the fastest-growing auto e-commerce company in the country. They are as passionate as we are about changing the way cars are bought and sold online and providing the best end-to-end customer experience.”

Vroom’s new funding will support the acquisition while allowing it to accelerate growth and expedite delivery, with the goal of shipping cars to customers all over the country within just 48 hours of purchase. The company also plans to open a new 500,000-square-foot facility near Indianapolis in early 2016.

“The transaction accelerates Vroom’s ability to become the market leader by combining Texas Direct Auto’s technology with Vroom’s distinctive platform,” said Michael Farello, a director of Vroom and senior partner at Catterton, one of the firm’s investors. “The market is huge and ripe for change, and today’s consumers expect the level of transparency, simplicity and customer service that only Vroom can deliver.”


  1. 1. Larry Perri [ December 18, 2015 @ 10:23AM ]

    Well done.Just a matter of time.2k16 should be great for the new venture.Good lucj


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