CAR marketplace startup Carro has four acquisitions in the pipeline as it looks to expand across South-east Asia, founder and CEO Aaron Tan told The Business Times as the company announced an extended Series B raise of US$30 million in equity.
The fresh funds – from new investors including SoftBank Ventures Asia, EDBI, Pennsylvania charitable trust Dietrich Foundation and South Korean investment firm NCORE Ventures – will bring Carro’s total Series B funding to US$90 million. Within three years of operations, the startup has raised over US$100 million from investors.
Carro’s first acquisition is of Jualo.com, an Indonesian consumer-to-consumer marketplace. The platform attracts over four million users per month and facilitated transactions worth over US$1 billion in 2018. It helps sellers trade new and used goods in over 300 categories including cars, motorcycles, property, fashion and electronics.
The size of the acquisition was undisclosed, though Mr Tan said Jualo had raised over US$5 million in venture capital. Its investors included Alpha JWC Ventures, US-based trading firm Susquehanna International Group, and Openspace Ventures, then known as NSI Ventures.
In Thailand and Indonesia, Carro has doubled its growth month on month in terms of gross merchandise value. Over 4,000 vehicles are transacted monthly on Carro in both markets, and “tens of thousands” of dealers have joined the Carro Wholesale network.
The next three acquisitions, which will happen by year end, will be in Malaysia, where Carro is looking to enter by the next quarter. “(The strategy is to) acquire capabilities above and beyond what we do,” Mr Tan said.
Carro is also eyeing Vietnam – where it has an engineering centre – and Myanmar as potential markets to expand to. These countries are “interesting” to the startup because of their huge populations and growing middle-income class.
Mr Tan said the firm is in talks with investors for a Series C funding round, which he predicts will see participation from several strategic investors.
Carro is projected to turn an operating profit within the next 18 months. The company’s revenue grew five times last year, while its marketplace transacted over US$500 million worth of cars.
Mr Tan said the firm has managed to keep its cash burn rate low by “doing more with fewer people” through automation, especially since salaries are the company’s biggest cost.
For instance, Carro – which also does financing – has a loan book that is well above S$100 million, but there are fewer than 15 people managing it, he said. The startup is able to approve and disburse loans within the same hour because of automated processes, compared to a bank that might take three to four days.
Carro employs about 350 employees across three markets. In March, it launched a subscription-based car service in Singapore where subscribers can pay a flat monthly fee that includes all costs associated with car ownership, such as insurance and road tax. More than 200 people are subscribed to the service and over 3,000 people are on the wait list.