- New investors Lumia Capital and Innoven, joined by existing investors 500Startups, Spiral Ventures
- New funds will be used to expand to more cities in Malaysia, Singapore, Thailand and Indonesia
SOUTHEAST Asia's largest consumer-to-business (C2B) used-car platform Carsome has received funding of US$6 million in a round led by Gobi Partners, which will be mainly used to strengthen its presence in its existing markets.
The latest funding round also attracted existing investors 500Startups and Spiral Ventures, as well as new Carsome investors such as Lumia Capital and Innoven.
When contacted by Digital News Asia, cofounder Eric Cheng did not want to disclose how much the company is now valued at after this funding round. However, he did reveal that the company will be adding one new board seat to its existing three seats.
Post fund raising, the company's board comprise existing directors IdeaRiverRun chairman Vincent Lee, Carsome cofounders Eric Cheng and Jiun Ee Teoh, as well as Gobi Partners vice president of investment in ASEAN Victor Chua as its new director.
"With the new funds, we are set to expand to more cities in the four countries we are in. Carsome's vision is to offer our car selling service to more individuals within South East Asia for now," Cheng told Digital News Asia.
Founded in 2015, Carsome is an online used car auction platform that provides users with high quality services and an efficient way of selling used cars. Consumers get a free online valuation, receive free inspection services, and then have their car immediately listed on the “virtual auction” platform, where over 1,500 used car dealerships can compete to buy the car. The process ensures that the sellers get the best price on their car and get paid immediately.
Carsome’s monthly revenue has increased by 12.5x since their previous fundraising round, and their annualized (monthly revenue multiplied by 12) gross revenue stands at approximately US$30 million. The company has also grown their staff strength from 6 in Malaysia to over 100 in Malaysia, Singapore, Thailand and Indonesia; the four countries where they currently have operations.
The platform plans to use the new funds to further expand regionally, while also launching more inspection outlets across the four countries, with a primary focus on Indonesia, Malaysia and Thailand. All 3 countries are, in fact, the largest car markets in Southeast Asia, with a total of 3.5 million used car transactions conducted annually. Thus far, Carsome has 5 locations spread out amongst the four countries and hopes to double this amount by the end of 2017.
“We entered the market to revolutionize the experience of selling used cars and are very excited with the results we have achieved so far. Traditional platforms do not provide users with a convenient way of getting the best price or an easy way of transferring the car. With Carsome, you can sell your car within a few hours without compromising on price,” said Cheng (pic left).
Carsome’s choice of investors for this round stems from a decision to work with a global investor syndicate that carries extensive knowledge of the industry. For example, Gobi Partners invested in Chezhibao in China, which recently just raised a US$100 million round; while Lumia Capital invested in Instacarro in Brazil.
Returning investor Gobi Partners was a follow-on investor in the previous round for Carsome, but has now taken the lead role, based on their conviction as well as their faith in both the team and the business.
“We have known the team since the very beginning of Carsome, and I am amazed by the progress that the team has made. The C2B model that Carsome emphasizes on makes a lot of sense especially in emerging markets like Southeast Asia because there is not enough data that enables trust between consumers. Carsome provides a de-risking element for both sides of the equation – the sellers who are generally individuals and buyers who are dealers. Moving forward, we will be helping the company to look for more strategic partners and investors, to build on the strong fundamentals Carsome has,” said Chua.
IdeaRiverRun, an early investor in Carsome, was also optimistic about Carsome's future: "The new strategic investors Carsome has for this round will bring about immense business opportunities in new markets for Carsome. In fact, they could potentially become another success within the region like ride-hailing company Grab," said Lee.
The used car industry in Southeast Asia is currently highly fragmented and inefficient, with an estimate of US$30 billion per annum in used car sales. Carsome takes on these problems by providing a platform that was built by an in-house tech team – one that provides users with an easier way to sell their cars and to connect with dealers – seamlessly.
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