Malaysia's Carsome eyes US IPO as it hits $1.75 billion valuation

Carsome is looking to almost treble its revenue to nearly US$1 billion this year from last year.
Carsome is looking to almost treble its revenue to nearly US$1 billion this year from last year.PHOTO: CARSOME.MY

SINGAPORE (REUTERS) - South-east Asian used-car marketplace Carsome Group said it has raised US$170 million (S$228.6 million) in a funding round from investors including Taiwanese chipmaker MediaTek, cementing its position as Malaysia's largest tech unicorn, valued at US$1.3 billion (S$1.75 billion).

The valuation comes as South-east Asian start-ups are attracting strong interest from regional and global funds, driven by robust growth rates, as investors take bets on post-pandemic plays.

"The most important thing we are trying to tackle is the distrust that's associated with the used-car industry," said Carsome's co-founder and chief executive, Eric Cheng, adding that consumers were becoming more open to buying cars online during lockdowns imposed in countries over the past year.

Six-year-old Carsome's competitors include Singapore's Carro and Indonesia's OLX Auto, part of OLX Group, which runs global trading platforms.

Mr Cheng said Carsome, which also operates in Indonesia, Thailand and Singapore, has been ramping up its retail centres and expanding its offerings, which include a five-day refund policy and a one-year warranty.

Carsome is looking to almost treble its revenue to nearly US$1 billion this year from last year and expects to turn profitable on an operating level in 2022, its chief financial officer, Juliet Zhu, told Reuters.

It had raised a total of more than US$100 million in its previous funding rounds.

Ms Zhu said Carsome is considering listing in the United States within the next 12 months and is in talks with sponsors of blank check companies.

"We have always been envisaging ourselves to be listing on US exchanges," Mr Cheng said, citing comparable valuations with US-listed car marketplaces available for investors.

Backed by the likes of Asian venture capital firm Gobi Partners and an arm of Mitsubishi UFG Financial Group, Carsome will use the funds to extend its spate of acquisitions.

This year, it acquired a stake in a Jakarta-based car and motorcycle auction service and agreed a deal with Australia-listed iCar Asia, which offers listing sites in South-east Asia.

Carsome said one of the largest sovereign wealth funds from the region joined the latest funding, but it declined to identify the fund. Carsome also secured new credit facilities of US$30 million.