Carousell merges with Telenor's 701Search

(From left) Mr Marcus Tan, Mr Quek Siu Rui and Mr Lucas Ngoo. The trio launched the Carousell app, a smartphone and web-based marketplace, in 2012. They were inspired by their year-long internships in Silicon Valley, in the United States. ST FILE PHO
(From left) Mr Marcus Tan, Mr Quek Siu Rui and Mr Lucas Ngoo. The trio launched the Carousell app, a smartphone and web-based marketplace, in 2012. They were inspired by their year-long internships in Silicon Valley, in the United States. ST FILE PHOTO

Part-cash, part-equity deal with Norwegian telco-owned unit values start-up at over $1b

Online marketplace operator Carousell, which was started about seven years ago by three friends from the National University of Singapore (NUS), has made another leap in its growth story.

The firm has agreed to merge with 701Search, the classifieds firm owned by Norwegian telco Telenor Group, in a deal that values the Singapore start-up at over US$850 million (S$1.16 billion).

Following the part-cash, part-equity deal, Telenor will be Carousell's new single-largest minority shareholder, with a 32 per cent stake in the combined company.

701Search's three online marketplaces - Mudah in Malaysia, Cho Tot in Vietnam and OneKyat in Myanmar - will retain their individual names and operations, but will now report to Carousell chief executive Quek Siu Rui. Meanwhile, 701Search's regional hub team, which operates from Singapore, will be fully integrated into Carousell.

Carousell's latest deal comes about seven months after classifieds giant OLX took a 10 per cent stake in the start-up, while injecting OLX Philippines into its business. Carousell added about 100 staff in the Philippines through the deal.

Carousell was launched in August 2012 by Mr Quek and his friends, Marcus Tan and Lucas Ngoo, who were inspired by their year-long internships in Silicon Valley start-ups while studying at NUS.

The mobile classifieds app focused initially on items like electronics before expanding to categories including clothing, property, cars and even jobs.

In May, The Straits Times reported that the three co-founders were believed to own 8.75 per cent of the company each, which on paper translated to US$48 million per person.

Both the OLX and Telenor deals show that Carousell is "driving rapid consolidation in the region", said Mr Rakesh Malani, the start-up's chief financial officer, in a press release yesterday.

 

Added Mr Quek: "Merging with 701Search will allow us to further this mission on an even greater scale and fortify our leadership in South-east Asia as Mudah, Cho Tot and OneKyat are already leaders in their markets."

Calling 701Search a "profitable and high-growth marketplace", Mr Johan Rostoft, head of online classifieds at Telenor, said: "This transaction presents an attractive opportunity for us to take the next step in our marketplace journey. We believe that Carousell is the best partner to continue growing the online classifieds business further in South-east Asia."

Founded in 2006, 701Search kicked off with Singapore Press Holdings Interactive International and Norway's Schibsted Classified Media as equal partners. It welcomed Telenor as an equal partner in 2013.

SPH sold its stake to Telenor in 2017 for about US$109 million. Schibsted also later divested its stake to Telenor in a share swap.

A version of this article appeared in the print edition of The Straits Times on November 22, 2019, with the headline 'Carousell merges with Telenor's 701Search'. Print Edition | Subscribe