Here’s an intriguing question: If CarGurus, the Cambridge-based auto shopping site, had relied more heavily on venture capital funding, would we be talking about it as part of the small flock of Boston-based “unicorn” companies?
CarGurus has been growing fast, and founder and CEO Langley Steinert says that this year the company will bring in “a little under $150 million in revenue” by helping used and new car dealers reach customers on the verge of making a purchase decision. And revenues have been growing at more than 500 percent annually, according to numbers that CarGurus supplied to Inc. Magazine. But with private companies, valuation is set by the investors in each new round of venture funding — and CarGurus has taken outside capital just once, around the time of its founding in 2006. That round was $4.5 million from a group of entrepreneurs who had previously co-founded another successful site with Steinert: the travel-planning site TripAdvisor.
So while CarGurus appears on “promising companies” lists with buzzier startups like Instacart and Slack, it hasn’t gotten its share of unicorn love. And that’s OK with Steinert, who says the company doesn’t need more money, and he’s not anxious to go public.
Talking about venture capitalists, Steinert says, “Why would I take your money? The company itself doesn’t need cash, we’ve been profitable for six-and-a-half years, and I’m not looking to sell my stock.” As for an IPO, Steinert says that even the act of filing to go public “opens you up to all sorts of scrutiny from competitors and other folks.” But he does acknowledge that it might make sense at some point, so that long-time CarGurus employees could realize the value of the shares they hold.
But even if he’s not in need of capital from VCs or validation from the public markets, Steinert does acknowledge the importance of elevating the company’s profile — and tricking out the work environment — to attract talent in a competitive hiring environment. “The biggest concern for us now is around recruiting — getting great sales and technical talent into the company,” he says. CarGurus has 165 employees (up from 23 when I visited in early 2013), and 105 of those are inside salespeople who try to bring on new dealers. Steinert says that 8,400 dealers now pay a monthly fee to list their inventory on the site (up from 2,200 last summer), and that the company is now focused on launching its site in other countries. It began operating in Canada in December, and England this month.
The site gets about 15 million unique visitors each month, and in May, the tracking firm comScore said its daily traffic numbers had surpassed those of AutoTrader and Kelley Blue Book, two competitors. eBay Motors remains out in front, however. Among the site’s unique features: it offers ratings and reviews from consumers on each individual dealer, and it assesses the price of each vehicle to determine whether it is a “great deal,” “good deal,” “fair deal,” “high price,” or “overpriced.”
As for all the discussions about whether successful consumer-focused tech companies can be built in Boston, Steinert says, “I always laugh when I see these articles about how the world really revolves around San Francisco. You can build great companies in Boston. It can be done.”
Some images from CarGurus’ new digs in East Cambridge are below. There’s a well-stocked game room; a kitchen with free catered lunch every day; and desks that can be raised with the touch of a button for those who like to switch from working in a chair to working on their feet. Before moving to Canal Park last month, CarGurus had employees spread across three separate offices in Cambridge.
The game room, with Pping pong, shuffleboard, and a wall of license plates.
One side of the office faces the CambridgeSide Galleria mall.
Coffee-makers and hubcaps in the kitchen.
Of course, the cornhole set is emblazoned with the CarGurus logo.
Scott Kirsner writes the Innovation Economy column every Sunday in the Boston Globe, in which he tracks entrepreneurship, investment, and big company activities around New England.
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