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Carro confirms new funding; claims to be on track for S$1b run rate by 2022

Carro confirms new funding; claims to be on track for S$1b run rate by 2022

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3 -min read
Listen to this article

USED car marketplace Carro raised close to US$150 million in debt financing facilities, as well as fresh equity from new investors Mitsubishi Corp and MS&AD Ventures this year, the startup announced on Wednesday.

According to regulatory data on intelligence platform VentureCap Insights, Carro raised US$6 million from Mitsubishi and MS&AD Ventures, the venture arm of MS&AD Insurance Group Holdings, in July. Its post-money valuation stood at US$289.1 million.

Carro declined to confirm the specific amount raised in the round. However, the five-year-old startup added that the debt financing facilities of close to S$150 million puts it in a "strong cash and liquidity position".

Separately, Carro's chief financial officer Ernest Chew told BT that Carro expects to hit S$1 billion in annualised revenue run rate by 2022. This figure is more than 15 times Carro’s revenue for FY2019 ended March. 

According to the regulatory filings of Trusty Cars Pte Ltd, Carro's legal entity, the startup recorded S$66.1 million in revenue for FY2019, up from S$15.9 million the previous year. 

When asked how Carro would multiply its revenue to such an extent, Mr Chew said: “The S$66 million is so outdated; it is (as of) March 2019. We are 1.5 years out already. I’ll safely say we’ve grown beyond that; our run rate is already multiple times that.” 

He declined to specify how many times the run rate has already multiplied by. 

Carro said that it currently has a nearly S$1 billion annualised Gross Merchandise Value (GMV) run rate and over 2 million monthly active users. 

The bulk of Carro’s revenue appears to be from car sales. According to the revenue breakdown, S$57.8 million came from the sales of goods, S$7.7 million from fees, commission income and interest income, and over S$513,000 from leasing income. 

In FY2019, its topline was weighed down by S$56.8 million in changes in inventories, leading to an operating loss of S$3.4 million. Its net loss stood at S$3.1 million, 23.7 per cent deeper than for FY2018. 

Mr Chew said that beyond car sales, Carro is also looking to grow other “ecosystem” services. “We have financing in Singapore; we are looking to grow that in all our core countries. We have insurance; we are looking to grow that. And the workshop and re-conditioning capabilities, we are already growing that beyond Singapore.”

Mr Chew said that saw a 500 per cent year-on-year revenue growth in September, driven by digitised car purchase services. Demand for used cars is “anti-cyclical”, as more people turn to second-hand cars instead of new cars during a downturn, he said. 

On the equity raise, he added: "We are thrilled to welcome our new strategic partners, who will help turbo-charge our growth. The funds raised showcase the trust from our financial backers as we remained Ebitda positive throughout the Covid-19 pandemic.”

Carro operates in Singapore, Malaysia, Thailand and Indonesia, and has a tech team in Vietnam.

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