Beepi aims for overhaul of used car industry
Published: October 31, 2014
How an old Jeep in Massachusetts drove MIT Sloan MBA Alejandro Resnik to rethink how we buy cars
Beepi CEO Alejandro Resnik, MBA ’13
Alejandro Resnik, MBA ’13, has always been driven to solve problems with innovation. So when he learned firsthand the misery of owning a lemon of a used car, Resnik set out to change the way Americans buy automobiles.
On April 15, 2014, Resnik launched Beepi, an online marketplace that enables customers to buy or sell vehicles from home with free delivery, the support of a certified inspection, and a money back guarantee for buyers. The company has grown quickly in California and last month secured a $60 million funding round to expand across the U.S.
“Beepi is the first company to sell cars 100 percent online. It’s as big an innovation as Zappos was in the 2000s when they started selling shoes 100 percent online,” Resnik said. “Both seller and buyer face better prices than when transacting with dealers, simply because Beepi doesn't have salesmen, lots, and other fixed costs—also because Beepi faces more supply and demand than any local dealer by virtue of operating in the entire market without geography restrictions.”
A Beepi inspector examines a used car in California
Raised in Argentina, Resnik launched his first startup, a domain registrar named Latin Dominions, when he was 18 years old. He sold that company to pursue his undergraduate degree in industrial engineering and operations and graduated from Buenos Aires Institute of Technology in 2006. While still in college, he started his second company, Global Vitamins, and ran it until 2010, when he sold it to attend MIT.
“MIT was my destiny, it was my dream school since I was very young,” said Resnik, who enrolled in the Entrepreneurship and Innovation Track within MIT Sloan’s MBA program. “I really wanted to be an entrepreneur again.”
At MIT, Resnik met other entrepreneurs and learned to “never accept the status quo. Instead of complaining about [a problem], I’m going to try to solve it. That's the DNA MIT gave to me, and for that I’ll be forever grateful,” he said.
In fact, if Resnik hadn’t moved to Massachusetts to get his MBA, Beepi might never have existed. It was there that Resnik bought the used Jeep that launched him on his mission to revolutionize the car market. Within days of purchase, his vehicle caught on fire—and yet the dealer wouldn’t take it back.
“I sued the dealer and got my money back plus damages,” Resnik said. “I also learned how unprotected consumers are in this big transaction.” He began researching the market for online auto sales. He surveyed a total of more than 300 students from MIT, Harvard, and Columbia, and learned that people would be willing to buy cars online if they had a guaranteed refund.
Resnik also sought advice from Fabrice Grinda, co-founder of OLX, one of the largest free classified advertising sites in the world. Grinda and Beepi’s co-founder and chief operating officer, Omer Savir, helped Resnik reimagine the used car market.
“We came to understand there was a big opportunity hidden in plain sight,” Resnik said, which was to connect sellers and buyers directly online, eliminating the role of the dealer.
To ensure quality, Beepi certifies every vehicle it lists. Cars are inspected in sellers’ driveways, and Beepi both sets the price and handles delivery. Buyers then have 10 days to test out their purchase; if unsatisfied, they can return the car for a full refund.
A new-to-you car is a significant purchase for many people, Resnik said. “To transform that experience into something delightful is very rewarding,” he said.
With a major contribution from Grinda, as well as funding from other angel investors, Resnik raised his first $1.3 million for Beepi in a seed round in June 2013. Another angel investor helped him organize a business plan presentation at Stanford University, which is where he met Savir.
Beepi raised another $5 million in February 2014 from Redpoint Ventures and used the money to line up inspectors, advertise the service, and buy dozens of cars to seed the market. Launched in California’s Bay Area in April, Beepi has expanded to Los Angeles and the staff has grown from six to 40.
“We are thrilled for the opportunity to bring a Beepi car to every single house,” Resnik said. “This whole thing would have been impossible without the education and network that MIT gave me.”