Vroom, the online used-car sales startup, is eyeing an initial public offering (IPO) for June of this year, according to sources familiar with the company’s inner-workings, The Wall Street Journal reported.
That comes even during the time of social distancing, with car sales and associated businesses lagging in business. Online car retailers may have the leg up in the pandemic, however, as people resort to more digital methods of purchasing in lieu of being able to go out.
And Vroom’s chief rival Carvana, a better-known entry in the online car space, has seen its shares creeping back up after initially falling during the pandemic’s early days.
The chief difference between Vroom and Carvana, though, comes from Vroom’s diversity in sales — Carvana made all of its money selling online, while Vroom made a sizable chunk of its sales from traditional car dealers it has a stake in, or on the wholesale market. But the stock market has rated Carvana’s majority-digital approach higher than traditional car dealers by a lot.
Vroom CEO Paul Hennessy told PYMNTS CEO Karen Webster recently that the effect on his business had been a “small chilling effect,” but not a total shutdown as it has been for others.
Instead, Hennessy said people have still been engaged in buying and selling cars during the shutdown, saying digital “does exactly what it needs to do” during the quarantine by delivering straight to their driveways.
He credited that to the extra time many buyers and sellers had on their hands — contrary to the initial expectation that the virus would stifle their appetites.
It’s unknown what valuation Vroom plans to go for, though the company raised $250 million in a private funding round last December. That round valued the company at $1.5 billion.
Vroom’s projections for 2021 have gone down since the pandemic has set in. Before, the company was predicting a $3.2 billion bounty; now it is only forecasting $2 billion, with the bulk coming from online sales. But even the $2 billion mark would put it closer to Carvana’s $3.9 billion in sales from 2019.
President Donald Trump has nominated Federal Reserve Governor Michelle (Miki) Bowman to be the Fed’s next vice chair of supervision.
Trump announced the selection Monday (March 17) in a post on Truth Social.
“Miki has been serving honorably on the Fed’s Board of Governors since 2018, and has great expertise dealing with Inflation, Regulation and Banking,” Trump wrote in the post. “Our Economy has been mismanaged for the past four years, and it is time for a change. Miki has the ‘know-how’ to get it done.”
It was reported March 11 that Bowman was the front-runner to become the next vice chair for bank supervision and March 12 that Trump planned to nominate her to the post.
Bowman was appointed to her current role at the Federal Reserve by Trump in 2018.
The position of vice chair of supervision was previously held by President Joe Biden’s appointee, Michael Barr, who gave up the seat in February to avoid a political and legal battle with Trump allies who wanted to remove him from the position.
Bowman often opposed Barr’s regulatory agenda.
In a statement released Monday, Bowman said she looks forward to working with her counterparts in other agencies and her board colleagues to “support a growing U.S. economy and prosperity for all Americans.”
“If confirmed, I will promote a safe and sound banking system through a pragmatic approach to supervision and regulation with a transparent and tailored bank regulatory framework that encourages innovation,” Bowman said in the statement. “I will leverage my hands-on experience as a banker, a bank regulator and a Board Member to address the challenges ahead.”
House Financial Services Committee Chairman French Hill, R-Ark., issued a statement Monday saying that he applauds the nomination and that he had previously expressed his support for Bowman to take on the new role.
“I am confident she will bring strong leadership in her new role as Vice Chair for Supervision,” Hill said in the statement. “I look forward to working with Miki on policies that support everyday Americans and businesses like reevaluating Basel III Endgame and reexamining the supervision and examination policies of the board.”
Senate Banking Committee Chairman Tim Scott, R-S.C., said in a Monday statement that Bowman has been an important voice in “pushing back on burdensome rules and regulations.”
“I’ve long called for more accountability at the Federal Reserve, and I’m hopeful that Governor Bowman will help increase transparency around the regulatory and supervisory work of the Board,” Scott said in the statement. “As a former community banker and state regulator, she brings a unique skillset and perspective to the role of Vice Chair for Supervision.”
As this was written, the ranking members of the two committees had not posted their responses to the nomination on their official sites, the committee sites or X.
