Beepi failure

Beepi

P2P used car online marketplace

Description

Beepi was an online peer-to-peer marketplace for used cars. Beepi promised to make the transaction easy, safe and profitable for all parties. The company would take care of inspecting, processing and eventually delivering the cars to the customers themselves. Vroom, a similar business to Beepi, requires only photos before cars are listed, while Beepi sent an inspector for on the spot inspection. Great customer service was one of Beepi’s strengths.

Stats

Category
Transportation
Country
United States
Started
In 2013
Closed
By 2016
Number of Founders
Two
Name of Founders
Ale Resnik, Owen Savir
Number of Employees
Between 101 And 250
Number of Funding Rounds
6
Total Funding Amount
$149M
Number of Investors
31
Precise Cause of Failure
Mismanagement of Funds
Business Outcome
Acquired

Cause of Failure

It went out of cash to operate and tried to sell itself to two potential buyers, but the potential sales were not successful and Beepi had to close operation.

The company had an incredibly high burn rate, spending about $7 million per month. The reasons for cash shortage were attributed mismanagement of funds to support expenditures unrelated to business such as covering the bills for the founders' partners and spendings unnecessary sums of money on expensive furnitures. At the same time, Beepi was also reported as giving disproportionately high salary and overtimes to its top management.

Besides having failed to manage the financial aspects of the startup, also Beepi’s logistics in buying and selling cars came short. Originally planning to complete an acquisition deal with Fair.com, one of its main competitors, that never happened and the company tried to negotiate with DGDG, but also this deal fell through. The company shut down in December 2016.

Go on Reading

Other Startups

Beepi

P2P used car online marketplace

General Information
Category
Transportation
Country
United States
Started
In 2013
Business Failure
Business Outcome
Acquired
Closed
By 2016
Cause of Failure
Mismanagement of Funds
Founders & Employees
Number of Founders
Two
Name of Founders
Ale Resnik, Owen Savir
Number of Employees
Between 101 And 250
Funding
Number of Funding Rounds
6
Total Funding Amount
$149M
Number of Investors
31
Description

Beepi was an online peer-to-peer marketplace for used cars. Beepi promised to make the transaction easy, safe and profitable for all parties. The company would take care of inspecting, processing and eventually delivering the cars to the customers themselves. Vroom, a similar business to Beepi, requires only photos before cars are listed, while Beepi sent an inspector for on the spot inspection. Great customer service was one of Beepi’s strengths.

Cause of Failure

It went out of cash to operate and tried to sell itself to two potential buyers, but the potential sales were not successful and Beepi had to close operation.

The company had an incredibly high burn rate, spending about $7 million per month. The reasons for cash shortage were attributed mismanagement of funds to support expenditures unrelated to business such as covering the bills for the founders' partners and spendings unnecessary sums of money on expensive furnitures. At the same time, Beepi was also reported as giving disproportionately high salary and overtimes to its top management.

Besides having failed to manage the financial aspects of the startup, also Beepi’s logistics in buying and selling cars came short. Originally planning to complete an acquisition deal with Fair.com, one of its main competitors, that never happened and the company tried to negotiate with DGDG, but also this deal fell through. The company shut down in December 2016.

Go on Reading

Circa

Mobile news app on diverse topics

Productivity
Acquired
$4.7M
Multiple Reasons
Productivity
United States
In 2011
By 2015
Three
Between 11 And 50
Between 1M 10M
Multiple Reasons
Acquired
Wattage

Online platform that made creating hardware easy

Software and Hardware
Shut Down
$200K
No Market Need
Software and Hardware
Canada
In 2014
By 2015
Three
Between 51 And 100
Less Than 1M
No Market Need
Shut Down
Wesabe

Personal finance management website

Finances
Shut Down
$4.7M
Bad Management
Finances
United States
In 2005
By 2010
Two
Between 11 And 50
Between 1M 10M
Bad Management
Shut Down
Flud

Social news reader for different platforms

Productivity
Shut Down
$3.1M
Multiple Reasons
Productivity
United States
In 2010
By 2013
Two
Between 11 And 50
Between 1M 10M
Multiple Reasons
Shut Down
Flowtab

Mobile app to order drinks on nightclubs

Food and Beverage
Shut Down
-
Bad Business Model
Food and Beverage
United States
In 2011
By 2013
One
Between 51 And 100
Nothing
Bad Business Model
Shut Down
Tilt

Social payment startup focused on crowd-funding

Finances
Acquired
$62.1M
Lack of Focus
Finances
United States
In 2012
By 2017
Three
Between 101 And 250
More Than 50M
Lack of Focus
Acquired