Malaysia-based online used car platform Carsome, which recently raised $19 million in a Series B round, has committed a sum of $7.1 million to its Indonesia operations to drive further growth in the country, according to the startup’s Indonesia country manager Andreas Djingga.
Carsome had earlier said that proceeds from its Series B round would be used to scale and deepen its foothold in Indonesia and Thailand, the region’s largest automotive markets with over 3.6 million used car transactions annually. The funding round was led by Burda Principal Investments and joined by Gobi Partners.
The company’s Indonesia business, which began operations in 2016, currently has more than 700 dealers and 70 inspection points. It claims to have sold 700 cars within two years, with last year’s total transaction alone reaching Rp 60 billion ($4.2 million), driven by a 20 per cent monthly growth.
“We will invest in capex for expansion purposes and to recruit more talent as we grow further,” Djingga said of the committed $7.1 investment for Indonesia.
Djingga said that parts of the fund will also be specifically allocated for marketing and to add more dealers on the platform, as well as to set up eight new inspection points by the end of the year.
Carsome started off as a platform that allows users to compare prices and offers of new vehicles as well as complete a purchase at their own convenience. It later launched a car selling service, which connects car sellers with dealers across the entire nation, effectively matching the supply and demand in the country where it operates.
While car trading will still be the company’s core business, Carsome has revealed plans to venture into other-related businesses, namely financing and warranties.
For Indonesia, the financing service is expected to be offered under a collaboration with fintech or multifinance companies and will be launched by the second quarter of next year, while the warranties service will be launched later on in the year, Djingga said.
He says the prospect of both services is bright in Indonesia as financing facilities will continue to be an interesting business in Indonesia, while warranties will be particularly beneficial for dealers outside of the Java island who are not able to see the cars in person.
“The prospect will be really good, because our used car dealer partners will have more confidence in the quality of the cars offered through the Carsome platform,” he said.
To accelerate growth in these fields, Djingga said Carsome Indonesia would also be open to the prospect of consolidation with other players in the industry.
With a projected 2 million car units sold in the next five years, Indonesia is inundated with automotive marketplace platforms looking to grab a slice of the car sales market share. Among the local players are RajaMobil.com, Garasiku and Momobil.id, while also in the mix are iCar Asia’s Mobil123 and Rocket Internet’s Carmudi.
Moreover, Carsome Indonesia will be expecting tougher competition from a few regional competitors – with a presence in Indonesia – that have recently received a substantial amount of funding.
Earlier this month, Singapore’s Carro announced the closing of a $60 million Series B round of funding led by SoftBank Ventures Korea, Insignia Ventures Partners and B Capital Group, while Frontier Car Group, which goes by the brand BeliMobilGue in Indonesia, last week announced it has secured an investment of $89 million from OLX Ventures.