Carsome guns for US IPO after raising US$170m funding at US$1.3b valuation
CARSOME, an online used-car platform in South-east Asia, has raised US$170 million in a funding round, pushing the Malaysia unicorn to a US$1.3 billion valuation and paving the way for a public listing in the United States.
The startup is gunning for a US initial public offering that could materialise over the next 12 months, but will "remain open to other options closer to home", chief financial officer Juliet Zhu told The Business Times. Reports state that the company is seeking a valuation of about US$2 billion.
This Series D round saw participation from one of the largest sovereign wealth funds in the region, as well as a pool of new international investors such as Catcha Group and MediaTek. Strong participation also came from existing shareholders such as Asia Partners, Gobi Partners and 500 South-east Asia. Carsome also raised new credit facilities of US$30 million.
It will use the investment to accelerate its growth in the retail and auto-financing business, said co-founder and group chief executive Eric Cheng. He told BT the startup aims to increase its current headcount of 2,000 by 40 to 50 per cent, as well as triple its revenue by next year.
The company has already started hiring aggressively, especially in top C-level positions. It recently brought on a chief data officer, a chief marketing officer and a chief technology officer.
It is also looking to increase its offline presence. The startup has opened several retail centres or showrooms in Malaysia, Indonesia and Thailand which allow customers to view cars and test-drive them. It has also set up a vehicle reconditioning centre in Malaysia. More of these services are in the pipeline next year, said Mr Cheng.
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The funding injection also strengthens Carsome's offering in auto-financing for car buyers and used car dealers, it said.
Providing financial services is said to be a key piece of the puzzle in the race to dominate the used-car marketplace. If startups like Carsome can collect and analyse car-sales data across South-east Asia, this will make their ancillary business of automotive financing more lucrative than that of traditional dealers.
Carsome was founded in 2015 and has expanded its presence to Indonesia, Thailand and Singapore in recent years. The company said it sees sales involving more than 100,000 cars on an annualised basis, which translates to around US$1 billion in revenue.
Carsome's latest financials are not available, but according to VentureCap, its Malaysian entity posted a US$206.8 million topline in 2019, with about US$195 million in cost of sales. Its loss stood at US$14.3 million. It said it works with more than 8,000 used car dealers who have collectively made more than 2.3 million bids.
Its regional rival, Singaporean used car platform Carro, is hot on its heels. Carro recently raised US$360 million in June to fuel expansion ahead of its pursuit of a US listing.
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