Very excited to invest in VINN and support @calebbernabe_ and team!
They have built an incredible product and the foundations of capital efficient business in a trillion dollar market.
Quick thread on my largest publicly announced investment to-date:
forbes.com/sites/ninawolp…
They have built an incredible product and the foundations of capital efficient business in a trillion dollar market.
Quick thread on my largest publicly announced investment to-date:
forbes.com/sites/ninawolp…
VINN has a crazy business model: they help consumers buy cars online but hold zero of their own inventory.
It’s an online marketplace with a very simple and effective product connecting consumers and cars at local dealerships.
It’s an online marketplace with a very simple and effective product connecting consumers and cars at local dealerships.
There's a few other companies that sell cars online; however their models are very similar to traditional dealers. Dealerships can be great businesses, yet can’t have high market share.
Car dealerships are very capital intensive, require massive working capital investment, and ultimately don’t have much differentiation.
This limits their scale, making the industry hyper fragmented - the largest players in the US have ~1-2% market share.
This limits their scale, making the industry hyper fragmented - the largest players in the US have ~1-2% market share.
Despite having a ~trillion dollar TAM~ and it being the year of our lord 2021, the structure of the auto industry has led to extremely low ecommerce penetration - less than 1% by some estimates.
https://twitter.com/TurnerNovak/status/1411147009902403588?s=20
Canada averages 1.9 million new vehicle sales per year, which is 11% the 17 million sold in the US (and neither of these numbers include used vehicles!) 
This capital intensity shows up in the two largest internet and legacy dealerships, Carvana ($55b market cap) and CarMax ($23b), which have lifetime invested capital of $35k and $74k per piece of currently available inventory, respectively.
h/t @DennisHong17 and @TenebristGlobal
h/t @DennisHong17 and @TenebristGlobal
VINN, alternatively, has over 100k listings in Canada (making it the 2nd largest in the country), and has burned a total of only $3.70 in cash per available unit to get there since founding the company two years ago (~100x to 200x more capital efficient).
How did they do this? They partner with and help local dealers move their inventory.
Since VINN doesn’t hold inventory themselves, there is no urgency and they convert cheap, generic, and/or uncompetitive traffic into high intent buyers with the best possible vehicle for them.
Since VINN doesn’t hold inventory themselves, there is no urgency and they convert cheap, generic, and/or uncompetitive traffic into high intent buyers with the best possible vehicle for them.
VINN’s product is insane - per Forbes, 20% of web visitors convert to a purchase (even higher than when I invested!), and this happens very quickly.
Canadians typically spend ~40 hours researching a car before buying. On VINN the process can be finished in less than 20 minutes.
Canadians typically spend ~40 hours researching a car before buying. On VINN the process can be finished in less than 20 minutes.
What this means: VINN has a highly effective, scaleable product that is 100x more capital efficient than competitors in a massive, highly capital intensive industry.
Due to its positioning, VINN also has a very close relationship with its customers.
There's an average of $1.2k in financing, insurance, and warranty profit per vehicle sold (accounts for most industry profits) - positioning VINN favorably as they scale up over the next decade.
There's an average of $1.2k in financing, insurance, and warranty profit per vehicle sold (accounts for most industry profits) - positioning VINN favorably as they scale up over the next decade.
@BananaCap_ is investing alongside a ton of other investors with expertise in content, fintech, growth, and product like @austin_rief, @nikitabier, @PimDeWitte, @varadhjain, @fahdananta (+ many more); and even FinTwit’s resident Carvana expert @DennisHong17 😂
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