A used car startup, which was given $150 million in venture capital, is shutting down after running out of money.
Beepi, which is based out of California and founded in 2013, is now selling its assets in order to pay back the investors who originally had confidence in the company, according to the Wall Street Journal.
The creditors apparently felt at the time that smartphone owners would purchase a used car without ever taking a test drive.
The business essentially operated as a virtual marketplace for preowned cars, where users could buy, sell or lease the vehicles. Payments could be made with direct debit, credit cards and even bitcoin. (RELATED: Dating App To Use Trump Immigration Order To Set Up Matches)
The company raised $60 million from venture capital firms that also invested in the ride-sharing startup Uber. It was valued at around $200 million in October of 2014 and $2 billion in May of 2015, according to the Wall Street Journal.
It seemed the company was once doing fine after it released a mobile app for Apple users in 2015 and had a peak of 300 employees. (RELATED: Mobile App Helps Save Hundreds Of Trafficked Children)
But it ran through its funding too fast as it expanded rapidly, and was unable to obtain more capital — a problem for many startups that fail to become the next big business.
Beepi was supposed to merge with another company or acquire funding on a number of occasions but nothing ultimately came to fruition.
“It’s a sad situation. It’s nothing anyone wanted or planned,” Martin Pichinson, co-founder of Sherwood Partners LLC, an advisory firm that handles alternatives to bankruptcies and is appointed to handle Beepi’s assets, told the Wall Street Journal. “We have to fulfill the obligation to wind the company down through an assignment for the benefit of creditors to get money to the creditors.”
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