Southeast Asian used car platform Carsome has secured $30 million in a Series D round, led by Asia Partners, it announced on Tuesday.
Existing Carsome investors, including Burda Principal Investments (BPI) and Ondine Capital, participated in the latest round. The fundraising is one of the largest all-equity financings to date in Southeast Asia’s online automotive industry, the company said in a statement.
The announcement confirms an earlier DealStreetAsia report, which stated that Carsome has raised funds.
Eric Cheng, co-founder and Group CEO of Carsome, said the fundraising will help strengthen the company’s regional leadership in consumer-to-business (C2B) used car e-commerce and accelerate new offerings in the B2C segment.
The Malaysia-based company claims to have doubled its monthly revenue in the past six months as the ongoing pandemic has resulted in a change in consumer behaviour across Southeast Asia. Price-conscious customers are now snapping up used cars as ride-hailing and public transport is deemed unsafe.
The firm claimed it recorded its highest-ever quarterly revenue in Q3 2020. In November 2020, the company sold 100,000 cars through the platform.
In a recent interview to the Financial Times, the company said it has plans for an initial public offering in the US in 2022. “The pandemic has definitely accelerated our business. We expect to be profitable across the group next year. Then we want to list on a major exchange like the Nasdaq,” Cheng told the newspaper.
Juliet Zhu, Carsome Group’s chief financial officer said, the firm has achieved operational profitability in October, ahead of its earlier projections.
“We have built a defensible, scalable, and profitable business with very healthy unit economics attributable to both growth in gross margin and steady improvements in productivity and conversion metrics,” said Zhu, adding that the series D round will further support potential M&A opportunities.
Asia Partners’ co-founder and a former executive at Naspers, Oliver M Rippel said the company has a combination of strong executive leadership and a robust business model.
“Carsome’s integrated approach offering a one-stop solution to used car buyers and sellers is genuinely impressive. We see that this will be the way forward for the used-car industry, and we look forward to working closely with Eric [Cheng] and his very capable team in further scaling the business across the region,” Rippel said.
Founded in 2015 by Cheng and Teoh Jiun Ee, Carsome is headquartered in Malaysia with operations in Singapore, Indonesia, and Thailand. Its regional network spans 6,000 car dealers, transacting over 40,000 used cars per year. In terms of transaction value, the startup reportedly clocks about $300 million annually excluding car loans and financing.
The used car platform last raised $50 million in debt and equity in its Series C round in December 2019, joined by Japan’s MUFG Innovation Partners, Daiwa PI Partners, Endeavor Catalyst, Ondine Capital, Gobi Partners and Convergence Ventures.
Carsome’s competitors include Singapore-based Carro, which in October announced it had raised S$150 million ($110.5 million), which included $11 million in equity from Mitsubishi Corporation, MS&AD Ventures, SoftBank Ventures Asia, and Golden Gate Ventures.