Lack of Financing Forces IMotors to Close

SAN FRANCISCO — IMotors, the nation’s first Internet-based seller of used cars, has shut down because of lack of financing.

IMotors, whose backers include Microsoft Corp. co-founder Paul Allen, is “ending operations due to a lack of sufficient capital to continue to grow the business,” the San Francisco-based company said in a notice on its Web site.

Chief Executive Lloyd Ward, who joined the company in January after resigning as chairman and chief executive of Maytag Corp., couldn’t be reached for comment. IMotors had about 700 employees until last month.

Closely held IMotors was backed by a group of investors, including Allen’s Vulcan Ventures, Global Retail Partners, Oak Investment Partners, Trinity Ventures and others, according to statements the company distributed through Business Wire.

IMotors is the latest in a string of failed Internet companies in which Allen’s Vulcan Ventures has been involved. Others include Value American Inc., Pop.com, Mercata, Reel.com and Beyond.com.

The company’s business was designed to locate, recondition and certify used cars for customers who ordered them over the Internet or through a toll-free telephone number.

Customers who have placed deposits will be issued prompt refunds and warranties will remain in force, IMotors said on its Web site.