Capital to accelerate regional expansion of Southeast Asia’s largest integrated e-commerce platform for cars
KUALA LUMPUR, JAKARTA, BANGKOK & SINGAPORE, 8 December 2020: Carsome, Southeast Asia’s largest integrated car e-commerce platform, recently completed its Series D fundraising. The US$30 million round, one of the largest all-equity financings to-date in Southeast Asia’s online automotive industry, was led by Asia Partners and was joined by existing Carsome investors Burda Principal Investments and Ondine Capital.
According to Eric Cheng, Co-founder and Group CEO of Carsome, this fundraising round, the largest equity investment in Carsome’s history, is a strong endorsement of its integrated business model, with end-to-end digital enablement across used car sellers, dealers, and buyers. “We will use this capital to strengthen our existing regional leadership in consumer-to-business (C2B) used car e-commerce and accelerate our already successful new offering in the business-to-consumer (B2C) segment. We look forward to rolling out Southeast Asia’s first-ever C2B and B2C integrated e-commerce platform for used cars, a significantly superior new retail experience,” said Cheng.
“Over the past six months, we have doubled our monthly revenue compared to pre-pandemic levels, a dramatic acceleration due to the impact of the ongoing Covid-19 pandemic on consumer behavior across our region,” Cheng added. “Consumers across our core markets of Malaysia, Indonesia, Thailand, and Singapore are increasingly purchasing cars to keep their families safe and adapt their businesses.”
Commenting on the fundraising, lead investor Oliver M. Rippel of Asia Partners observed that Carsome’s combination of strong executive leadership and a robust business model position the company well for future growth. “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 and his very capable team in further scaling the business across the region.”
Founded in 2015, Carsome has grown to employ more than 1,000 people and today transacts an annualized 70,000 cars totalling US$600 million in transacted value on its online platform. Building on its original foundation in Malaysia, one of Southeast Asia’s largest car markets, Carsome then launched its operations in Singapore, Indonesia and Thailand, deepening its regional footprint.
Since founding, Carsome has delivered an impressive record of accomplishments, growing from strength to strength. Carsome recorded its highest revenue quarter in Q3 2020 in its history, doubling its revenue from the pre-pandemic period. In November 2020, Carsome celebrated its 100,000th car sold through its platform – an important milestone achieved within five years of founding.
Notably, Carsome has also achieved operational profitability as of October, ahead of earlier projections. “We have built a defensible, scalable, and profitable business with very healthy unit economics attributed to both growth in gross margin and steady improvements in productivity and conversion metrics,” said Juliet Zhu, Carsome Group Chief Financial Officer. “Our Series D round will further support potential merger and acquisition opportunities in acquiring ancillary capabilities and consolidating our supply chain.”
Crucial to Carsome’s success has been its commitment to rigorous car inspections, offering Carsome-inspected and certified cars directly to customers in a seamless fashion, building a reservoir of consumer trust and brand equity in an essential but historically complex industry. Every car that transacts on the Carsome platform goes through a comprehensive 175-point inspection, and every Carsome car purchase is backed up with an extended warranty and a money back guarantee.
Carsome’s successful track record of digitizing a traditionally offline and fragmented industry, as well as its resilience in the face of the global pandemic, were key factors in several existing investors’ decisions to reinvest in the Series D round. “We appreciate the way Carsome has continued to support car sellers and dealers through the pandemic,” said Albert Shyy, the Singapore-based Managing Director of Asia for Burda Principal Investments, who first invested in the Series B round. “We witnessed Carsome’s growth and resilience during the pandemic and are proud to continue our support,” added Randolph Hsu, the Taipei-based Founding Partner of Ondine Capital, who first invested in the Series C round.
While the platform flourishes from digitalization tailwinds, Carsome remains focused on supporting its partners to navigate new challenges brought about by the pandemic. Carsome introduced various incentives and bonus rewards for used car dealers in Malaysia, Indonesia and Thailand under its Dealer Alliance Support Program. The company also introduced its Covid-19 Support Fund this year for employees affected by the pandemic.