Carsome acquires 51% of used car dealer CarTimes in IPO push

Singapore

USED car platform Carsome has acquired a 51 per cent stake in Singapore-based CarTimes Group, a used car dealer and parallel importer.

Sources said that the deal is half in cash and half in shares and believed to be worth around US$60 million. Regulatory filings show that on Mar 7, CarTimes' managing director Eddie Loo transferred 408,000 ordinary shares in the company to the entity Carsome Group. Loo still owns the remaining 49 per cent of CarTimes.

The Business Times has reached out to Carsome and CarTimes for comment.

CarTimes was founded in 2001 by Loo, and has operations across the automotive value chain. The group sells used cars and parallel imports new ones, while also operating a financing arm and a workshop service.

The 21-year-old business has had several forays into the digital space. When the pandemic hit, CarTimes turned to livestreaming to sell its cars and engaged a local star filmmaker, Jack Neo, and a getai singer, Wang Lei, to be the faces of its promotion.

In 2018, Loo also led a consortium of 40 car dealers to set up an online marketplace, UCARS, to compete against upstart online portals including sgCarMart and Carousell.

The Carsome deal comes amid a flurry of transactions in the automotive space. Online car marketplace sgCarMart was recently sold by Singapore Press Holdings to a Toyota consortium for S$150 million.

Acquiring CarTimes could help boost the inventory of cars for Carsome's business, while giving the platform the personnel and expertise needed in running a physical car dealership.

This might aid any online to offline plays in South-east Asia's most expensive car market, where drivers still regularly buy their vehicles offline.

Malaysia-based Carsome, whose investors include sovereign wealth fund Qatar Investment Authority and Temasek-linked investor 65 Equity Partners, has signalled intentions to list soon.

It is weighing options including a merger with a special purpose acquisition company.

The used car platform completed its acquisition of online automotive marketplace iCar Asia in February.

The deal would help the company build an "integrated automotive ecosystem" for dealers to source, advertise and sell cars, and for consumers to research, sell and buy cars, Carsome had said.

Startups like Carsome are under immense pressure to show a sustainable growth story as they head for the public market. A challenging macroeconomic environment has pummelled stock markets this year, with investors taking flight from loss-making companies amid a risk-off sentiment.

Shares of both US-listed Sea and Grab are down 58 per cent this year after disappointing earnings reports. Grab rival GoTo, a merger between Indonesia's Gojek and Tokopedia, on Tuesday (Mar 15) unveiled plans to raise 17.992 trillion rupiah (S$1.69 billion) in a domestic initial public offering (IPO) that could value the company at up to US$29 billion.