Carro aims to treble Ebitda to S$130m ahead of potential IPO

[SINGAPORE] Car marketplace and automotive services platform Carro aims to boost its profitability and will seek a final round of fundraising to help it grow, before seeking an initial public offering (IPO).

Its chief executive officer Aaron Tan wants Carro to be much more profitable first, aiming for earnings before interest, taxes, depreciation and amortisation (Ebitda) to hit around S$130 million as a precursor to an IPO – roughly trebling it from its current level.

“Once we get to (that level), I do like to think that we can potentially list with a good tailwind because of scarcity. Name me another high-growth tech company that is profitable, Ebitda positive and sizeable?” he said.

Investors often use Ebitda as a measure of how well a business is doing operationally.

Carro does not publish its full financial results, but has released highlights from its past audited figures. It first achieved positive Ebitda in 2020.

Tan said that Carro’s Ebitda for the financial year ended March 2025 was “around S$40 million”, near FY2024’s S$43 million.

According to the data platform Handshakes, for the full year ended Mar 31, 2024, Carro (Trusty Cars) incurred S$29.2 million in losses after tax from continuing operations, narrowing from a loss of S$132 million in the previous year.

Listing the reasons

Speaking to The Business Times, he said that the company will close a final round of funding in 2025 before it seeks an IPO.

“We are concluding another round that I expect will close before August... and that is probably our last raise, from a pre-IPO standpoint. We are (Ebitda) profitable, so we technically don’t need to raise more funds… hence (the upcoming round) should be our last,” he said.

He did not elaborate on the amount involved or the investors taking part, but added: “I can only say that valuation is up, versus the previous round. So we count that as a blessing, given the current state of the markets.”

Carro’s most recent funding round in December 2024 was for an undisclosed amount with South Korean venture capital firm Woori Venture Partners.

The funds from the coming round will be used to expand its operations within South-east Asia, with a focus on Indonesia, where parent company Woori Financial Group maintains a significant presence.

Carro’s largest disclosed funding to date was a Series C round in 2021 of S$360 million, led by SoftBank Vision Fund. It made the startup the first automotive marketplace unicorn in South-east Asia.

Tan said the company is now valued at “well over” US$1 billion.

Despite that, an IPO is not in the immediate future.

“I can only say that there are no investors in our capitalisation table that expect us to list this year, given what has been happening in the markets over the last 12 months,” he said when asked about the timing of an IPO.

As to where Carro’s IPO will take place, Tan said: “We will do what is in the best interest of our shareholders. All options are open… be it SGX (Singapore Exchange) (or) a US stock exchange; even Hong Kong is a possibility.”

Previous Singapore-headquartered unicorns have chosen US listings: Sea is listed on the New York Stock Exchange, and Grab is listed on Nasdaq.

More expansion

The company has continued the momentum it established in 2024.

For the financial year ended Mar 31, 2024, Ebitda increased to S$43 million from around S$4 million in the previous corresponding period. Similarly, gross profit was up 49 per cent at S$143 million, while operating losses narrowed by 92 per cent to US$7 million. Revenue was around S$1 billion.

While the full audited figures are to be confirmed, Tan told BT that in the latest financial year ended March 2025, revenue increased by around 15 per cent, while gross profit grew more than 20 per cent.

“My plan is to double Ebitda to more than S$80 million by the end of March 2026,” he said, through both organic and inorganic growth.

A number of mergers and acquisitions will take place in the next three to six months, which includes expansion into another Asia-Pacific (Apac) market.

He declined to name the new market, but said: “We will go wherever there is market demand for our products or services. But we are laser-focused on Apac markets versus, say, the Middle East or the US. Because we know Asia, and thereby have the right to win.”

Carro has long relied on acquisitions to boost market share.

In 2024, it expanded to Japan and Hong Kong, meaning it is now present in a total of seven markets, in addition to Singapore, Malaysia, Indonesia, Thailand and Taiwan. It established a presence in Hong Kong through the acquisition of used car platform Beyond Cars.

Part of the reason is that the organic growth of used car sales has been slower than Tan anticipated.

He said that on average, the company transacts 6,000 to 7,000 used cars in Singapore a year, which gives it a market share of about 10 per cent. Across its various markets, it sells more than 100,000 cars a year.

“I expected us to be far bigger than where we are today (in used car sales)… I learnt that it is a lot faster to buy than to build a company from scratch.”

But Carro has also focused on growing its recurring revenue rather than just used car sales.

“The biggest shift in the tech world is ‘quality of revenues’ – we shouldn’t be going for bad growth or growth at all costs,” he said. In fact, used car sales now account for “very little” of Carro’s gross profit.

Recurring revenue streams are more than 85 per cent of the company’s top line, said Tan. These come from automotive servicing, financing and insurance offered through subsidiaries that include Genie Financial Services.

“So tomorrow, if I shut down the used car sales, it doesn’t really matter, to be very frank. The revenues and the profits will keep coming in.”