Soon to be a Unicorn, Carsome Plans to Go-Public in the United States Stock

Platform car marketplace is getting more attention. After Carro announced the achievements menjadi unicorn, the next news came from the rival Carsome who soon followed became unicorn and is listed on the United States stock exchange.

Carro and Carsome are startups from Singapore and Malaysia, but both already have a presence in Indonesia.

According to sources Bloomberg, Carsome is working with its advisors to book a valuation of up to $2 billion in its public listings -- through either a SPAC vehicle or a conventional IPO. The target is to finish around the end of the year.

Previously submitted by Deal Street Asia, that Carsome is seeking further funding with a target of $200 million -- if successful, then the company's valuation will also rise above $1 billion and have the opportunity to become unicorn Malaysia's first.

At the end of 2020, Carsome has also booked series D funding of $30 million or the equivalent of 424 billion Rupiah. Investors involved include Asia Partners, Burda Principal Investments and Ondine Capital. It is by far the largest all-equity financing in the online automotive industry in Southeast Asia.

A year earlier, in early December 2019, Carsome announced the acquisition of series C funding of $50 million. This round was supported by MUFG Innovation Partners, Daiwa PI Partners, Endeavor Catalyst, Ondine Capital, as well as investors in previous rounds including Gobi Partners and Convergence Ventures.

Business momentum car marketplace

Lately it seems the platform car marketplace on the rise, not only in Southeast Asia, a similar service in India “Spinny” is reportedly in the midst of finalizing its latest $100 funding round led by Tiger Global Management. This news was first reported Money Control. If successful, the investment will boost the company's valuation to $800 million.

In our analysis, there is a projected momentum for the rapid growth of the used car buying and selling market. One that is quite visible is related to the shift towards electric vehicles. In Indonesia, several parties – including the government – ​​have started to develop The roadmap conversion to electric vehicles, the target is 2030.

In the transition period, of course, the current car users [especially the upper middle class] will fill the transition flow. They are likely to fill the used car markets in exchange for new electric car units. On the one hand, the declining selling price of conventional cars will open up a new segment of car owners from the lower classes.

Platform car marketplace such as Carsome and Carro facilitate transaction processes from upstream to downstream with C2B, B2B, and B2C business models. At C2B, they provide inspection services and buy used cars directly from consumers. The digital platform, inspection center, and experts provided allow the car appraisal and sales process to occur more efficiently.

Meanwhile in B2B, the platform that accommodates used cars from customers also allows dealership owners to auction cars that have been inspected for resale in various cities. While in B2C they sell inspected cars online through the site and/or application.

The value proposition is clearly strong, because consumers will feel helped by the results of transparent inspections carried out, thereby increasing confidence in processing the used car purchase.

On the other hand, other factors such as the pandemic condition are also the driving force on the side supply-demand, because of the community's need to have safer and more comfortable mobility facilitation. Some who previously used public transportation have the potential to be compelled to buy [used] cars for their daily needs, because private vehicles are considered safer from transmitting the virus.

In Indonesia, both Carro and Carsome maximize their penetration strategy into various cities through the O2O strategy. Supporting transactions made via digital, they present the points that become inspection center and showroom. This approach is clearly needed, because in fact used car transaction activities are still dominated by the conventional approach through dealers located in almost all cities.

But interestingly, startups that play in this field claim to get consistently increasing traction every year. Even Carsome said, in the midst of the pandemic, in Q4 2020 they managed to record the highest revenue which was double the period before the pandemic. In addition, Carsome also managed to achieve group operational profitability in Q4 2020.

In November 2020, General Manager of Carsome Indonesia said, overall they have also helped sell more than 100 thousand used cars in their operational areas, namely in Indonesia, Malaysia, Thailand and Singapore.