Autodaq Creates Online Marketplace For Used Auto Industry
17 January 2000
Autodaq Creates Online Marketplace For Used Auto Industry
Silicon Valley-Based Startup Moves $93 Billion
Used Auto Auction Market to the Internet
SAN MATEO, Calif., Jan. 17 -- The used automobile industry
took a giant leap online today with the launch of Autodaq, a San Mateo,
Calif.-based automotive e-commerce company that has created an Internet
trading marketplace with a dramatic new level of efficiency for businesses
that buy and sell used vehicles.
Autodaq (http://www.autodaq.com) is the online "hub" serving dealerships and
other businesses that traditionally buy and sell used vehicles primarily
through physical automobile auctions -- a $93 billion market wrought with
inefficiencies. The company, which was founded by a foursome with a
collective diverse background in automotive, finance and high technology, is
financially backed by August Capital, represented by David F. Marquardt, an
experienced venture investor with many notable successes such as Microsoft,
Sun, Tumbleweed and Cobalt Networks.
"The traditional method by which these businesses buy and sell used
vehicles today is highly fragmented, inefficient and, thus, unnecessarily
costly for both buyers and sellers," Autodaq CEO, President and co-founder
Adam Boyden said. "We have created a Web-based marketplace that greatly
increases the number of buyers and sellers participating in a virtual auction
to improve the bottom line for all participants."
The total cost for completing a vehicle sale through the physical auction
process currently represents approximately 10 percent of the automobile's
value, nearly $10 billion annually. Costs include but are not limited to:
cost of capital, depreciation, transportation of the vehicle, auction fees,
reconditioning and search costs.
Autodaq's technology and related services are designed to eliminate up to
50 percent of those supply chain costs, or about $5 billion annually.
Autodaq's full suite of Internet-based offerings include proprietary auction
functionality and facilitation of transportation, inspection, title
processing, single-point viewing and access to more extensive, granular
information.
Sellers -- financial institutions, manufacturers and other fleet, lease
and rental operators -- increase profitability and ROI by gaining access to a
larger buyer pool capable of bidding on each vehicle; selling vehicles more
quickly, thus reducing depreciation and freeing up capital, creating
efficiencies in reconditioning, detailing and transportation costs. Major
sellers currently doing business through Autodaq include Bank One and World
Omni Financial Corp.
Buyers -- franchised, independent and Internet-based dealers, and
wholesalers -- increase profitability by gaining real-time access to an
extensive online inventory of used vehicles, as well as the option of instant
buying ("Click and Buy") and/or bidding, notification when desired vehicles
become available, instantaneous reporting and shipping and delivery.
"Part of Autodaq's focus is the dealer community," Boyden said. "Autodaq
presents an avenue by which dealers can embrace the Internet and use it to
their advantage, lowering the costs of attaining the high-quality used
vehicles their customers most desire."
Bank One, which has partnered with Autodaq in development and pilot
testing, already is benefiting from the service.
"So far, we have seen a gain of several hundred dollars per off-lease
vehicle that we sell through Autodaq," said Keith Kendrick, president of Bank
One's eCommerce unit. "That's mostly because of lower transportation and
auction costs and a faster sale that reduces capital and inventory costs. We
also have seen better sales prices. We expect that to continue as Autodaq's
online auction grows, because many more buyers will view and bid on our
inventory than can do so at a physical auction.
"Dealers who have bought our vehicles through Autodaq say they love the
system. It's a win-win for us and our dealers."
Autodaq is Web-based, meaning that customers only need Internet access to
connect to the site; no additional software or hardware is required. Autodaq
provides a "biography" of each vehicle based on detailed configuration and
condition information, including all options gathered by recognized
independent inspection companies. Photographs of vehicles can also be placed
online.
Buyers have two options for purchasing vehicles, both of which are
available 24 hours a day: buying with a simple click or submitting a bid.
Through Autodaq's proprietary "Click & Buy" function, buyers can obtain a
vehicle by paying a flat price set by the seller, thus immediately removing
that vehicle from auction. Buyers also can bid on vehicles. The minimum
escalation bid is $100 and bidders can monitor each auction in real time
throughout the day, increasing their bid at will. The winner of each auction
is notified when the auction closes at 8 p.m. PT daily.
Unlike traditional auto auctions and online marketplaces, Autodaq is not a
matching service. Included in Autodaq's full service offering, transportation
prices are listed on the site on a vehicle-by-vehicle basis and delivery is
arranged by Autodaq after the vehicle is purchased. Vehicles sold through
Autodaq are transported directly to the dealer. Delivery of title and other
official documents occur separately following receipt of payment.
"This is one of the most compelling business models I've seen, and I've
seen a few," August Capital's Marquardt said. "Autodaq is a winner."
Founded in July 1999, San Mateo, Calif.-based Autodaq (http://www.autodaq.com) is
transforming the used automobile industry by establishing an Internet
marketplace with a dramatic new level of efficiency for businesses that buy
and sell used vehicles. Autodaq provides online services and technologies
that significantly reduce costs while increasing profitability by eliminating
chronic inefficiencies for financial institutions, manufacturers and other
fleet, lease and rental operators, and franchised, independent and Internet-
based auto dealers and wholesalers. Autodaq is a privately held company; its
investors include August Capital, Zilkha Ventures and several angel investors
from the Internet and automotive industries.