Carousell to merge with 701Search, valuing Singapore start-up at over $1 billion

Carousell co-founders (from left) Marcus Tan, Quek Siu Rui and Lucas Ngoo. PHOTO: ST FILE

SINGAPORE - Online marketplace operator Carousell has agreed to merge with 701Search, the classifieds firm owned by Norwegian telco Telenor Group, lifting the value of the Singapore start-up to over US$850 million (S$1.16 billion) from US$560 million earlier this year.

Following the part-cash, part-equity deal, Telenor will become 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 now report to Carousell chief executive Quek Siu Rui. Meanwhile, 701Search's regional hub team, which operates in 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.

Both the OLX and Telenor deals show that Carousell is "driving rapid consolidation in the region", said Rakesh Malani, the start-up's chief financial officer, in a press statement on Thursday (Nov 21).

Mr Quek added: "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", 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 was kicked off with Singapore Press Holdings Interactive International (SPHI) and Norway's Schibsted Classified Media as equal partners. It welcomed Telenor as an equal partner in 2013.

SPH, which publishes The Straits Times, later sold its stake to Telenor in 2017 for about US$109 million. Schibsted also later divested its stake to Telenor in a share swap.

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 the National University of Singapore (NUS).

The mobile classifieds app focused initially on items like electronics before expanding to categories including clothing, property, autos and even jobs. It has also expanded into eight markets across Asia.

Besides Telenor and OLX, Carousell has been backed by investors such as Naspers, Rakuten Ventures, Sequoia Capital, 500 Startups, Golden Gate Ventures, DBS, and EDBI.

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.

SPH Brightcove Video
Carousell co-founders Marcus Tan, Quek Siu Rui and Lucas Ngoo talk about their latest tech developments, their plans for the future, and offer advice to budding entrepreneurs.

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