After years of shifting gears, online car sales platform Tred settles on model and lands $3M
If making customers happy was the only secret to success, Grant Feek would have been an entrepreneurial winner years ago.
Since launching his Seattle-based startup Tred in 2012, Feek has been in the business of helping people buy and sell cars. In its initial iteration, the company partnered with dealerships and delivered cars to people’s homes for test drives and sales.
A few years later they shifted to helping people sell their own used cars. They employed “wheel-estate agents” who ran around Seattle, taking photos and inspecting vehicles and facilitating test drives and sales. At one point Tred was buying the used cars itself and reselling them — not realizing for a period that it was operating illegally, selling more vehicles than allowed by law without being a licensed dealer.
Customers loved these varied concierge-style services, but they weren’t fiscally sustainable or scalable.
“It was a very popular service, but we had all the operational complexity of a dealership, but none of the benefits of a centralized lot,” Feek said.
In 2017, he settled on a final solution, automating the entire buying-and-selling process, providing a platform for collecting payments, arranging financing and warranties, and transferring titles.
It’s a “completely digital, nobody-leaves-the-office dealership,” Feek said.
With the new model in place, Tred has shifted into a growth phase:
- It raised $3 million last month (the company has raised a total of $12 million, which includes prior convertible notes).
- Last year Tred’s workforce more than doubled to 25 employees.
- The company has expanded into Oregon, California, Texas and Florida.
- In the next two months, it’s adding three more states, covering up to 45% of the U.S. market in total.
“We want to be the back-end engine for P2P (peer to peer) transactions,” Feek said. “We want to be PayPal for big ticket goods.”
It’s fortuitous timing. Used car sales are way up thanks to COVID-driven demand for personal vehicles combined with a production slowdown of new vehicles due to a shortage in computer chips. Pandemic stimulus checks are also providing people the means to buy cars.
Tred provides a platform for doing the sales transactions digitally, and the company is able to vet the buyers.
There are other companies in the space, including Vroom and Blinker. Many others facilitate car advertising, but not the services required for the actual sale.
As Tred has seemed to at last found its product market fit and settled into its business model, Feek’s focus has changed over the last six months.
“Once you have a company heading down the right track,” he said, “the most important thing is building a culture that makes your employees feel valued and happy.”