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Carsome raises US$50m Series C funds, profitability claim unclear

Carsome raises US$50m Series C funds, profitability claim unclear

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3 -min read
Listen to this article

MALAYSIAN used car trading platform Carsome has raised US$50 million in Series C funds from new investors that include MUFG Innovation Partners, the corporate venture capital arm of Japan's Mitsubishi UFJ Financial Group and Daiwa PI Partners, the private equity arm of Japan's Daiwa Securities Group.

In a press statement on Wednesday, the startup also claims to have turned an operating profit in Malaysia. But in response to queries from The Business Times, Carsome clarified that this excludes headquarter costs, such as "C-suite management, and headquarters middle and back-office costs".   

Carsome declined to comment on whether "C-suite management, and headquarters middle and back-office costs" include staff costs, which are typically included in operating profit and is a large recurring expense for startups.

The startup also would not specify the exact quarter it turned an operating profit, sans the so-called "headquarter costs".

According to regulatory filings of Carsome Sdn Bhd – which may not fully reflect all aspects of the business – the company recorded a net loss after tax of RM19.3 million (S$6.3 million) in 2018, on the back of RM403.7 million in revenue.

Following MUFG's strategic investment, Carsome will collaborate with the Japanese bank and its subsidiaries in South-east Asia to provide financing for dealers and consumers via its platform.

MUFG owns both Bank Danamon Indonesia (Danamon), one of the largest banks and the leading used automotive financing company in Indonesia, and The Bank of Ayudhya Public Company Limited (Krungsri), Thailand's fifth-largest bank in terms of loans and deposits.

"We aspire to be the Visa/Master network of auto transactions, and build a collaborative ecosystem of partners to provide the best experience to consumers in South-east Asia," said Carsome co-founder and CEO Eric Cheng.

Other investors in the Series C round include venture capital funds Endeavor Catalyst and Ondine Capital, as well as existing investors Gobi Partners and Convergence Ventures. 

The money will be used by Carsome to expand into more cities in South-east Asia and to offer more financing products to dealers and consumers through strategic partnerships. The startup currently has a presence in Malaysia, Indonesia and Thailand.

Carsome also said it is targeting "operational profitability" in its remaining markets by end-2020, though it will also exclude the "headquarter costs".

The company has over 700 employees across its South-east Asia offices. Over 40,000 cars are transacted annually on its platform, totalling more than US$300 million in transaction value, excluding all loan and financing deployment.

To date, Carsome has a coverage of more than 6,000 dealers across over 50 cities and has recorded over 12,000 monthly car inspections.