The online marketplace for used cars has exploded in recent years with a bevy of startups putting their own spins on a conventional business that consumers have both loathed and depended upon for decades.
Beepi, a peer-to-peer platform that lets consumers buy and sell cars online, has built its business around a 240-point inspection that all cars must pass before being sold on the marketplace.
This professional inspection, which is conducted at the seller’s home, has helped the company “create a peer-to-peer relationship based on enough trust to do something as radical and risky as buying and selling a car,” says Jeff Brody, a partner at Redpoint Ventures, the lead investor in Beepi’s Series A round.
It’s also cut out a lot of potential customers, founder Ale Resnik tells Fortune. Every month, approximately 3,000 people try to sell on Beepi, but can’t because their cars don’t meet the standards of the inspection, according to the company.
Beepi wanted to find a way to make the platform more democratic for all sellers, Resnik explains.
Thus, the startup is piloting an auction program called Beepi Blue in Arizona, Texas, and Florida. Beepi quietly launched the service earlier this month. Beepi will offer an auction price to customers whose cars don’t meet the basic qualifications required for an inspection. For example, the car might be too old to go through the typical process. If the offer is accepted, Beepi will pick up the car and pay the customer. Beepi will then sell the car at a national auction house, not on Beepi.com. The company is currently working with Adesa, vehicle auction operator that has 76 locations across North America.
If the car meets basic standards, but doesn’t pass the more stringent 240-point inspection, the customer will be offered another auction price.
Get Data Sheet, Fortune’s technology newsletter
“We did this as a response to consumer demand and for sellers who were dissatisfied because they couldn’t use the Beepi service,” Resnik says. “Nobody wants to be left out and have to go to Craigslist or a dealer.”
Beepi is going up against several other online used car startups, including Carvana, Shift, and Vroom. The auction is another way Beepi is trying to differentiate itself and capture more revenue in the process. Earlier this year, the Mountain View, Calif.-based company added a leasing option and full nationwide delivery to its used-car buying business model.
Both Resnik and Brody emphasized that Beepi is not abandoning its core business—just adding another layer.
“Along the way, we’ve found an efficient second business that can add to our profitability and enhance our brand, and that’s why we’re going after that,” says Brody, adding that the auction is a byproduct business that came out of doing a lot of inspections. “We’ll stick to the core mission because we find it so compelling.”
The startup operates in 16 cities in Arizona, California, Florida, New York, and Washington as well as the greater Washington D.C. area. Beepi doesn’t share specific revenue numbers. Resnik did say the company has been able to sustain an average 16% month-over-month growth in cars sold since it launched in 2014. Beepi sales grew more than 250% in the first half of 2016 compared to the same period last year, according to a company spokeswoman.
Watch how GM CEO Mary Barra is trying to keep women in careers:
So far, Beepi hasn’t had trouble attracting investors. The company, which employs 270 people, has raised nearly $149 million from venture capital firms—including Redpoint, Sherpa Ventures, Foundation Capital, Capital Invent, and DE Shaw—within the last two years.
Beepi raised $70 million late last year in a funding round led by SAIC Motor Corporation, one of China’s largest domestic automakers. SAIC makes and sells passenger and commercial vehicles in China as well as auto parts and engines.
The online used car marketplace is still attracting interest from investors. However, the number of new entrants as slowed to a trickle and competition has squeezed many out. That leaves a small handful of more established startups, including Beepi to battle over a highly fragmented industry that has been dominated by local dealerships and more recently listing services.
“I think there’s plenty of room for two, three, or four big companies to emerge in this model,” Brody says. “The aspiration is for Beepi to be the biggest brand in the space.”