Carsome raises US$19mil; possible IPO in 3 to 5 years
By Chong Jinn Xiung March 8, 2018
- Funding will be used to expand presence in Indonesia and Thailand
- Existing investors Gobi Partners, InnoVen Capital and Lumia Capital invest again as well
MALAYSIAN startup Carsome, an online used car platform has announced that it has raised US$19 million (RM75.8 million) in Series B funding. The company is supported by a mix of strong local and global investors based in Europe, China, USA, Japan and Singapore.
Leading this round is Burda Principal Investments, with existing investors Gobi Partners, InnoVen Capital and Lumia Capital following on.
Carsome currently has operations in Malaysia, Singapore, Indonesia, and Thailand.
Carsome co-founder and chief executive officer Eric Cheng (pic) explained that the new funds will help Carsome advance its ambitions to be the 'new default way' of selling used cars within the region.
Following this round of funding Cheng hinted at the possibility of an Initial Public Offering (IPO) in the next three to five years but currently, they are focusing on their efforts on growing the company as big as possible.
“We aim to deepen our reach in the market as we seek to grow our market share in the region. The foundation has been built now on Indonesia and Thailand, which will help us accelerate the growth speed in conjunction with this funding round,” he said.
The funds will be channelled towards scaling and deepening Carsome’s foothold in Indonesia and Thailand - the region’s largest automotive markets with over 3.6 million used car transactions annually.
As part of the expansionary move, Carsome aims to strengthen its brand awareness via more localised marketing content, as well as focusing on delivering a superior customer experience for the car selling process on its platform.
Carsome will also be introducing new product verticals such as financing and warranties to empower car dealers and to make it easier for customers to sell their vehicles on its platform.
According to Carsome, monthly total transaction value has increased by more than fourfold since January 2017. In addition, total car sales facilitated on its platform have more than quadrupled with more than 70% of the transactions being done inter-city, which is a strong testament to the value proposition and product fit of Carsome’s business model.
They have also grown their staff strength to over 150 in all four operating countries to cater for the rapid expansion of their business.
Cheng admits that his biggest challenge at Carsome has been finding the right talent though he expressed hope that this round of funding would help attract top quality talents to Carsome and help them realise their ambition to be the market leader.
In the mid-term, Cheng is firm that Carsome will retain its headquarters in Malaysia until he finds it to be a suitable location.
Following this round of funding, Burda Principal Investments principal Albert Shyy said, “We feel Southeast Asia's burgeoning automotive sector is in the early stages of a digital transformation and believe there is a tremendous opportunity for Carsome to bridge the offline-to-online space. We are thrilled to join them as they build the leading used car platform in the region.”
Lead investors from the last round, Gobi Partners’ founding partner Thomas Tsao added, “Gobi is backing Carsome once more because the management team has consistently beat expectations. With their proven track record, Carsome is in an enviable position to capture the unprecedented growth in Asean’s used car market. This round of funding will put Carsome in the driver’s seat for Southeast Asia.”