Vroom, the online car retailer that has its head office in Houston, is winding down its e-commerce vehicles and closing its one physical dealership, Texas Direct Auto, in Stafford. It will maintain its auto finance company and its vehicle analytics company.
The company went public via a $468 million IPO in June 2020 that priced its shares at $22 and gave the company a market cap of $2.8 billion. The shares peaked at $74 a few months later. In aftermarket trading, the shares are now $0.26.
Vroom has never been profitable and as of September 30, 2023 it had an accumulated deficit of $1.8 billion. Since the beginning of 2022, the business has been producing an EBITDA loss between $50 million and $60 million a quarter.
The company relocated from Manhattan to Houston in 2022 as part of its cost-cutting exercise.
The company had been trying to raise funds to scale the business. However, it faced an impending hurdle in that it has a $213 million debt due to mature in March 2024.
Late last year, the company settled with the state of Texas over allegations that it failed to disclose significant delays in transferring titles to buyers. Vroom agreed to pay $2 million in penalties and $1 million in attorney fees.
Vroom has about 900 employees, not including those employed by the auto finance company. The company occupies 100,000 square feet of office space in the Westchase area. That lease expires in November. The TDA dealership is approximately 58,000 square feet under a lease that expires in September.