Online car retailer Beepi plots expansion

Beepi, an Internet-based used car retailer that delivers vehicles to buyers' homes before they've taken them for a test drive, is raising another $300 million in venture capital to fund its expansion nationwide.

The Silicon Valley start-up, which is changing the way people buy and sell preowned vehicles, currently operates in California, Arizona and Texas. It hopes to have a presence in every major city by the end of the year.

The company's planned growth comes as customers start to warm up to the idea of buying a used car online, even though it may seem a little strange at first.

"It is definitely a little scary to make such a major investment without ever having sat in the car or driven it," said Miles Johnson, a Mountain Valley, California, resident who recently bought a 2012 Honda Civic through the site.

Read More Rental car firms stall with investors

Similar to how retailers sell shoes online to customers who haven't tried them on, Beepi is taking a digital approach to cars and trucks, albeit with a much higher price tag.

The company's business plan is pretty straightforward: to remove the hassle of finding, negotiating and ultimately buying or selling a used vehicle. It only handles models that are less than 6 years old, have fewer than 60,000 miles and have never been in accident. Technicians at the company's Fremont, California, distribution center perform a 185-point inspection to ensure they're in good condition. In addition, buyers have 10 days to return the vehicle.

The company is targeting $350 million in revenue this year, up from $100 million last year.

Read More America's new favorite: Small SUVs and crossovers

"People nowadays are used to buying things online. They are used to transacting with Amazon, they are used to transacting with others and so buying a car online is the next logical step," said Owen Savir, who started Beepi last year with a friend.