Boom & Bucket scoops up investment to put second-hand machinery sales back on track
If you’re selling a second-hand HD-DVD player or you want to sell your car, there are plenty of Web 2.0-empowered solutions that can help you out. Life is slightly different if you are trying to shift an earth-mover or two. That’s the market Boom & Bucket has entered; hauling the industry of second-hand heavy machinery […] …
If you’re selling a second-hand HD-DVD player or you want to sell your car, there are plenty of Web 2.0-empowered solutions that can help you out. Life is slightly different if you are trying to shift an earth-mover or two. That’s the market Boom & Bucket has entered; hauling the industry of second-hand heavy machinery sales into the current millennium. The company is digging in its heels and just raised a $5.5 million round to take on this deeply entrenched industry.
The problem the founders are solving is the traditional way of selling heavy equipment — there’s Craigslist, or local auctions. Both have downsides, and neither have the level of trust that consumers have started to appreciate from the Carvanas and Shifts of the world. Moreover, unlike, say, an eBay auction, there seems to be a tacit understanding that when you buy something, you buy it as-seen, as-is and where-is. Horror stories abound on purchases that didn’t turn out quite the way the buyer intended.
There is real money in play, too. “I’m looking at our Deals thread today in Slack,” says Adam Lawrence, co-founder and CEO of Boom & Bucket. “It’s people who have made offers on machines: $75,000; another $75,000; $50,000. The biggest thing we’ve sold cost more than half a million bucks — and the least expensive thing that we’ve sold is around $12,000 or so.”
The company is trying to resolve some big issues in this industry; trust, visibility and financing.
“EBay has had a ‘motors’ category since 1997. The problem with that is that a machine can show up and they can look flawless — that is a common thing in this space. Someone painted it bright yellow, now it looks new, but it may have a fundamental flaw. The engine overheats, or the hydraulic tubes all need to be replaced,” says Lawrence. “We have a customer testimonial from someone who bought a $350,000 bulldozer from us. He had bought one from auction previously and had driven it up this giant mountain, and it overheated up there. The previous owner had swapped out a good engine for a bad one and covered up the oil warning light. That’s often what you get when you roll the dice at auction. So that’s what we’re trying to solve.”
The company has already sold millions of dollars’ worth of equipment, with early customers including SunState Equipment Rentals, Spiniello Construction and Los Angeles County. The average machine falls in the high five-figure range, and the company has sold “almost 100 machines” since launching its platform in February.
“The average piece of equipment has sold for 40% more than it would at wholesale auctions, made possible by the added layers of trust and reassurance,” Lawrence says. “These machines are the lifeblood of our customers — it’s like literally something that they rally around. This is the equipment that builds the infrastructure for America, and it has to be reliable. If you’re building a bridge and your excavator breaks, and you have 10 dump trucks lined up to take dirt away, the whole day is ruined for everybody. And so we have this ability to underwrite that and make sure that the quality remains high.”
The company employs 15 people, and is fueling up its machinery to go into a serious growth phase, starting with comprehensively solving the supply side of this marketplace play first.
“We want to grow pretty substantially. We want to build and release the core platform,” says Lawrence, saying that the first version of the app is live on the website now. If you want to buy a $300,000 bulldozer, he has you covered. “We want to work with a number of large customers on the supply side and prove out the value proposition to them, and then continue to grow the team pretty substantially.”
The $5.5 million round of seed funding was co-led by Human Capital and Brick & Mortar Ventures, the largest construction-focused venture fund. Supporting investors include 8VC, Global Founders Capital, Streamlined Ventures, Quiet Capital and MaC Venture Capital.