Shift Technologies files for bankruptcy
Shift Technologies, Inc., an omnichannel retailer for used cars, has announced its intention to file for Chapter 11 bankruptcy, aiming for an orderly wind down of operations.
The Company’s two locations in Oakland, CA, and Pomona, CA, and the Company’s website have ceased operations
“We deeply value our employees, customers, partners, and the communities in which we have operated. This was not the outcome we had expected or hoped to achieve. This decision follows months of trying to raise capital and restructure the balance sheet to allow the Company to operate unencumbered in this challenging environment. Ultimately, the extensive efforts of our senior leadership team and advisors were not successful. We want to thank all our dedicated employees, customers, and vendors who have supported us over the years.” – Shift CEO Ayman Moussa.
Shift is a San Francisco-based online marketplace for buying and selling secondhand cars.
Founded in 2014, it raised a total of $504 million across 11 funding rounds. Notable investors include SoftBank Group International, BMW i Ventures, Goldman Sachs Investment Partners, and Highland Capital Partners.
It became a public company in late 2020 after merging with Insurance Acquisition Corp. It generates money every time a car is sold and when people opt for any of the financing and vehicle protection products it offers. Its revenue for 2021 and 2020 was $637 million and $196 million, respectively. In the second quarter of 2023, the company reported a revenue of $47.3 million from selling 1,998 retail units. The gross profit per unit was $1,557, with an adjusted gross profit per unit at $1,522. The net loss amounted to $25.8 million, which is 55% of the revenue. This was an improvement from Q1’23’s loss of $48.1 million or 89% of revenue. As of June 30, 2023, the company had cash reserves of $32.2 million.
Shift terminated 120 employees last week ahead of its Chapter 11 filing and retained 24 employees to facilitate Shift’s wind-down of operations.
