After helping start and, eventually sell, TripAdvisor, Langley Steinert set his sights on another not-so-sexy industry with surprisingly high stakes: Online car-shopping.
In 2006, the serial entrepreneur founded CarGurus. The Cambridge startup — which allows users to compare specs and prices of cars and overall service of various car dealerships — is the nation’s third most-trafficked car sales site.
CarGurus’ pricing algorithm filters through more than five million cars, gathering data on model, mileage, condition, trim and region. Each vehicle is then sized up against dozens of other cars to calculate its value.
“When a user searches for a car on our site, we return matching results that are ranked according to which listings are the best deals from the best-rated local dealers — not according to which dealer paid more to advertise, which is the typical, traditional car shopping site model,” Steinert told BostInno via email.
CarGurus is profitable and on track to generate $50 million this year in revenue, which comes from two sources: dealer subscriptions, which give car dealerships more information about their consumers, and an ad package that brings dealers higher up in the rankings.
But will the company reach a similar height to Steinert’s former travel tech venture, TripAdvisor?
“We are on track to be that big,” stated the CEO. “Our goal is for CarGurus to become the largest car shopping and research website in the world.”
In March of this year, Cars.com, the car e-commerce site, was put up for sale by a group of newspaper publishers behind online ad listings firm Classified Ventures. The asking price? A whopping $3 billion, according to the Wall Street Journal. The site generates around $400 million to $500 million in revenue every year, according to a person familiar with the site.
Though Cars.com attracts around 11 million car shoppers a month, according to its website, its stats pale in comparison to AutoTrader, which claims to reach 14 million car buyers monthly. The company was supposed to go public in 2012, and reported about $1 billion in revenue for 2011. Autotrader then aborted its IPO, which was priced to pull $300 million, a second time in 2013.
If CarGurus’ internal moves are a sign of its external traction, however, the Cambridge company seems to be strongly positioned to scale and gain ground.
Steinert shared that the company plans to nearly double its workforce and take the team from its 60 employees to 100 by the end of 2014. And yes, that means that CarsGurus is looking for a new locale. The company, which currently works out of a 15,000 square-foot building in Harvard Square, is scoping out new space around 50,000 square-feet in Kendall Square.