Carousell CFO quells concerns over stagnant valuation in Telenor deal

Rakesh Malani, CFO of Carousell.

Carousell’s core valuation of $550 million did not increase following its merger with Telenor’s Asia online classifieds unit 701Search last week, confirmed the startup’s CFO Rakesh Malani.

Venture-backed startups are usually known to press for higher valuations, making this a slightly atypical development for the company. Malani, however, sees no reason to be concerned.

“We are building the business progressively,” Carousell CFO Rakesh Malani told DealStreetAsia in an interview. “Have we made progress as a business? You bet we have. Are we feeling good about the path that we’re on? Absolutely. But do I want to be optimising for my valuation at every week or month, or when we have any such conversation?”

Carousell’s pre-merger valuation of around $550 million was roughly the same as the one reported in April after it acquired OLX Philippines from global internet group Naspers.

“We are trying to do the right thing and these things take time. When I started having these conversations with Telenor, it was when we had just concluded our other transaction with OLX,” said Malani.

The value of Carousell’s combined entity, including 701Search’s marketplaces in Malaysia, Vietnam and Myanmar now stands at $850 million.

All primary shares, no secondary shares traded 

2019 has been a milestone year for Carousell.

The online classifieds startup inked two major deals with global strategics this year – one in April with Naspers for OLX Philippines, and the other with Telenor Group’s 701Search for Mudah in Malaysia, Cho Tot in Vietnam, and OneKyat in Myanmar.

Both have expanded Carousell’s presence to three new markets: Vietnam, Myanmar and the Philippines. The cash-and-equity transactions have also brought in a fresh injection of capital, and a pair of global players – Naspers and Telenor Group – onto its cap table. Today, Telenor is Carousell’s largest shareholder, holding a 32 per cent stake (post-merger) in the company.

Malani declined to comment on the startup’s operational runway following last week’s deal but said that it is adequately funded for the near future. No secondary shares were traded in this transaction, indicating that all of its existing investors, including Rakuten Ventures, Sequoia Capital India and Golden Gate Ventures, continue to remain invested in the Singaporean company.

Following the merger with 701Search, Carousell’s revenues are now projected at $40 million for 2019, from just $7 million a year ago. It serves eight markets in the Asia Pacific, making it one of the regional leaders in its category.

“These transactions are not trivial, and this is a big step change for the company. We want to make sure we get it right. The idea is not just to merge and create a big company. The idea is to run it super well and figure out how we can serve many more users who are coming online in Southeast Asia and give them the best experience that they can possibly get,” said Malani.

Moving forward, Carousell plans to further build the company’s infrastructure and invest in marketing and talent acquisition. Malani declined to comment on its revenue breakdown after the merger.

Carousell is known to generate revenue from three streams: online advertising, where it partners with brands and merchants to sell; premium visibility like Bumps and Spotlight, where it charges sellers to increase customer reach; and Carousell Pro, a subscription service where it partners car dealers and real estate agents to list their ads.

Car and real estate listings are understood to be key growth areas, which tend to generate higher fees while drawing high traffic volumes on the platform. In November, Carousell said it recorded over half a million monthly listing views for its property arm. These also generated more than 56,000 leads more month, up roughly 163 per cent from 2018.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.