Doug DeMuros Cars and Bids receives $37 million investment from The Chernin Group

[Vovchandr]

https://www.forbes.com/sites/kbrauer/2023/01/30/doug-demuro-from-car-videos-to-car-auctions-to-car-empires/amp/

 

Doug DeMuro: From Car Videos To Car Auctions To Car Empires

 

 

Doug DeMuro is arguably the most successful automotive YouTuber in the relatively short history of that young medium. He’s got over 4.5 million subscribers, and his 20-30 minute car reviews regularly earn more than a million views, often within a week or two of being posted. He’s already become a central figure in America’s automotive culture, having shared screen time with Jay Leno while being a recurring guest on mainstream car blogs and becoming involved in the annual Pebble Beach Concours. And now, with a $37 million investment from The Chernin Group (TCG) in his recently-launched Cars & Bids auction site, Doug can add “entrepreneur” to his list of accolades.

 

 

Doug’s YouTube channel started in 2013, based on feedback from a Jalopnik reader, where Doug was freelance writing at the time. Doug started his channel as a sort of personal ownership vlog of special-interest cars he purchased, the first being a Ferrari 360. “That’s the most pedestrian exotic car you can imagine, but back then nobody on YouTube had a Ferrari. That was kind of interesting to people. What is it actually like to own a Ferrari?” Doug did the same thing with an Aston Martin, a Hummer, and a Viper.

 

 

That format lasted about 3 years, but Doug realized his viewers were more interested in getting his perspective on many cars, versus in-depth analysis on only a few, so he pivoted to reviewing special-interest cars and modern vehicles, often with the help of owners or local dealerships lending him the vehicles. His “quirks-and-features” themed reviews have become a vital research component for an increasing number of new- and used-car shoppers because of Doug’s approachable, relatable style that never feels intimidating or condescending to the mainstream car buyer.

 

 

Doug’s YouTube activity remains a key component of his daily workload, but it now has to share time with his management of Cars & Bids, the auction site he launched in June of 2020. Cars & Bids has since sold over $230 million worth of special-interest cars. The site focuses primarily on sub-$100,000 collectible vehicles from between 1980 and 2010, though it also features a lot of new electric vehicles, including Rivian trucks and SUVs, and the Ford F-150 Lightning. One-to-three-year-old special interest models, like the Ford Bronco and $100,000-plus exotic cars, are also increasingly appearing in Cars & Bids online auctions

 

 

Why did Doug start Cars & Bids? “About three and a half years ago it hit me that I wanted to do something with my audience that was less beholden to the YouTube algorithm,” said Doug. “You never know what’s going to happen tomorrow or the next day, but I have a big audience and I really needed to create a business where I control the revenue streams, as opposed to YouTube being able to turn them on or off at any given time.”

 

 

 

Doug partnered with Blake Machado to launch Cars & Bids, and he admits it was extremely stressful for him to start his own business. “I’ve told a lot of people I’m never starting another business again. That was tough,” said Doug. “First, the anxiety before we launched, especially in the middle of a global pandemic, but also the question of is it going to work, and are people going to show up? I’m not sleeping any of those nights. And even after the launch you’re anxious. It’s just an enormous amount of stress and fear.”

Of course the site did work, growing so rapidly that Doug’s stress immediately switched from “will people show up?” to having to hire a team of people to manage the flood of activity it generated starting day one. Doug tells us, “The first day we received 900 submissions, and the guy who was reviewing all of them was just me, and I still have to shoot videos!” He immediately had to hire writers and auction support people. And the next 2 years were a race, trying to keep up with the growth. “That’s the nature of a startup. A hole appears and you hire people to plug it, then another hole appears and you hire more people.”

 

That rapid growth, jumping from two auctions a day to four auctions a day to 10 auctions a day, led to interest from venture capitalists and private equity firms. “The thing that was appealing about The Chernin Group is they work specifically with these creator-owned and creator-led businesses, like MeatEater and Barstool Sports,” says Doug. “We’ve heard from all these potential investors, but here’s one that gets it. That understands the limitations and the benefits a creator brings. That understands that paid marketing maybe isn’t the way to achieve growth. Maybe it’s going after people who are naturally there because they love the creator. Here’s a group of people I don’t have to explain this to.”

Doug felt it was time to bring someone on board that really knows how to take a business to the next level. “We’ve hired a CEO who has been a CEO before. We got an investment from a business who has invested in similar businesses before. I still own a good chunk of the business and I’m still going to be day-to-day involved,” Doug assured us.

 

Steve Cousineau, Principal at TCG, told us, “At TCG, we get excited about businesses built for highly engaged, passionate communities — the modern enthusiast car sector is a perfect example. Doug has done a tremendous job of connecting with that community through his unique brand of content, and building a commerce platform tailor fit to serve them. We believe Cars & Bids has only just scratched the surface of this sector.”

 

Ro Choy will be the CEO of Cars & Bids, with previous experience as the CEO of BitTorrent and the CBO of Luxe. Ro began his career at eBay Motors, and plans to focus on accelerating growth of the marketplace through increased investment in content, technology, and business operations.

 

 

[slowdude]

Happy for Doug to see this big ticket happen. I'm concerned we are seeing a boom in auto auction sites, similar to what is happening in the beauty industry... rapid valuation and VC investment only for there to be too many players in the space. (Looking forward to hagertys auction plan as they poached a lot of RM people).

 

Doug got out at the right time.