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IP Interview
Published January 27, 2024

ACV Auctions: Operating Model

Executive Bio

Former VP Operations Strategy at ACV Auctions

Interview Transcript

Disclaimer: This interview is for informational purposes only and should not be relied upon as a basis for investment decisions. In Practise is an independent publisher and all opinions expressed by guests are solely their own opinions and do not reflect the opinion of In Practise.

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For a concrete example, how far would an inspector typically travel to a car dealer on average?

I have my personal opinions on this, but yes, it can create upside unit economics. One more thing I want to mention. The reason for ACV's growth pattern in terms of expansion, as you can see from our analyst day deck and some of the presentations we've had, is that the Northeast has historically been our best-performing market. This is partly due to geographic population density. Because you can service so many more vehicles in a shorter distance, you have much better unit economics in terms of inspector density in a market and available opportunities in the northeast than you do out West. We've struggled with slower growth rates out West, partly due to geographic challenges.

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What about equipment? Do you provide them with any tools, like a computer or tablet, for the inspection?

We provide about $2,500 worth of equipment per inspector. This includes our proprietary virtual lift, an iPhone, an audio recording device, and an OBD2 device. If they want to buy additional tools like wrenches or lights, that's on them. But our baseline equipment cost is around $2,500. Everything is run through a mobile application. We don't provide laptops or tablets.

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