M’sian used car site becomes unicorn after acquiring iCar Asia

Since July 13, 2021, Carsome has become the first technology unicorn based in Malaysia after acquiring 19.9% ​​of iCar Asia Ltd (iCar) listed in Australia from the Catcha group.

Warning: As Grab (then MyTeksi) was founded in Malaysia, there has been some discussion as to whether the title of “Malaysian first unicorn” actually belongs to Grab, which is now headquartered in Singapore. However, the point of this piece is not to debate who owns the title, but rather to review Carsome’s accomplishments.

Carsome will then offer to buy the remaining 80.1% of iCar from existing shareholders, a total transaction estimated at more than $ 200 million.

In exchange, Catcha Group will become a shareholder of Carsome, bringing the startup’s valuation to over US $ 1 billion.

Over its 6 years of operation, Vulcan Post has documented key elements of Carsome’s journey since 2015. This latest development marks another notch in the Malaysian startup’s belt, and we felt it was appropriate to return. on the course of its course.

2015: Almost 200 transactions within 4 months of launch

Carsome was launched in February 2015 with the aim of becoming a one-stop-shop for finding and comparing the best prices for different cars from different dealers.

The Carsome team in 2015 / Image credit: Carsome

She has worked closely with resellers to ensure that her users can exclusively enjoy the benefits, and her efforts have paid off.

Less than 4 months after its creation, it had already helped users save a cumulative total of RM500,000 of all transactions. At the time, co-founders Eric Cheng and Jiun Ee said Carsome users could save up to RM 3,000 off the retail price per car.

During his first round table in August 2015, he raised US $ 350,000 of 500 Startups and IdeaRiverRun (IRR), and announced that it has already formed partnerships with 100 dealers in the Klang Valley, Johor and Penang.

2016: Tackling the underserved used car market segment

But it didn’t take long for Carsome to turn to a segment that needed more help. At a little over a year, Carsome then rotated and entered the used car market.

Its main business now was to provide customers with a hassle-free experience when it came to selling their used cars to dealerships across the country. This was done through a transparent tendering system.

Eric told Vulcan Post in 2016, “Introducing our proprietary pricing data based on actual transactions has been key to growing the business. Used car prices vary widely and the market value of used cars was difficult to assess.

To remedy this, the site has set up a online estimation service for cars and provided 162 point car inspections, which she said was the first and only to do so at the time.

Through these services, users could put their pre-liked cars on its auction system. From there, over 200 dealers across Malaysia would determine the best price for the car.

Since the start of 2016, Eric has shared that they have experienced exponential growth in their income and had a 62% compound monthly growth rate.

Dictionary time: The compound monthly growth rate (CMGR) is the average month-to-month growth over a longer term period, typically 6 to 18 months. A CMGR of 20% is already considered exponential.

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They also served a 200,000 users on average who bought and sold cars on the site, and had passed the mark of 1,000 cars sold annually. By now, Carsome Singapore had also started its activities.

Carsome’s growth was further supported by a US $ 2 million Series A in a round led by IRR, with the participation of IMG Investment Partners and 500 Startups.

2017: $ 30 million in gross annual revenue

In June 2017, Carsome raised $ 6 million funding in an A2 round led by Gobi Partners. His monthly income has increased 12.5 times since his previous round of funding in 2016.

At the same time, its annualized gross sales amounted to US $ 30 million. At present he also had a multiregional presence in 4 markets: Malaysia, Singapore, Thailand and Indonesia. In total, they worked with over 500 dealers.

2018: US $ 19 million in Series B funding and hints of a future IPO

In March 2018, Carsome announced a Series B financing which raised $ 19 million from a mix of global investors based in Europe, China, the United States, Japan and Singapore.

Co-founders Eric Cheng (left) and Jiun Ee (right) / Image credit: Hubert Burda Media

The round was led by Burda Principal Investments, with participation from Gobi Partners, InnoVen Capital and Lumia Capital.

After the funding round, Eric had raised the possibility of an IPO in the next 3-5 years, but concluded that they would focus on growing the business first.

Carsome also said it will introduce new vertical products such as financing and guarantees for the benefit of car dealers and customers.

In a series B2 financing round later, he raised $ 8 million. By the end of the year, he had passed the bar 10,000 cars sold annually.

2019: Creation of Carsome Capital

Carsome established Carsome Capital in 2019, which provides advice and solutions for finding and applying for financing, insurance and other related services for the purchase and sale of motor vehicles.

The same year he announced a partnership with Funding Societies Malaysia, the largest P2P financing platform in SEA. Together they dealer financing available, which helped local car dealerships buy used motor vehicles.

As a result of this collaboration, approximately 1,600 car dealerships would have benefited from a total financing amount of US $ 200 million.

The end of 2019 saw a US $ 50 million Series C which included a combination of equity and debt investments from new and existing investors. At this time they passed the mark of 40,000 cars sold annually.

2020: Launch of its B2C segment with a flagship store

With CIMB Bank, Carsome has co-developed a inventory financing solution for used car dealers, intended to reduce processing time and minimize physical documentation through the site.

In May 2020, Carsome also launched its RM 55.5 million Dealer Alliance Support Program. This initiative provided short-term impetus in the form of bonuses and lines of credit to help used car dealers rebuild their businesses and finances after MCO.

A little later in August 2020, the startup officially launched its B2C segment on the occasion of the opening of its flagship store, the Carsome Experience Center in KL.

The new Carsome Experience Center / Image credit: Carsome

This is where users could test drive the used cars they are interested in through the site, after making an online reservation. If users were happy with their choice, then they could make a purchase with Carsome to handle financing, ownership transfer and even loan applications as needed.

In November 2020, Carsome obtained its 100,000th used car salesperson, and a month later, announced to have raised a US $ 30 Million Series D Round.

2021: Founding of the Carsome Academy to secure the future of young people

It was in January 2021 that Carsome officially announced the creation of its first technical institution in Malaysia, the Carsome Academy.

It aims to provide young Malaysians with guaranteed technical education and career opportunities. The establishment is a Sistem Latihan Dual Nasional (SLDN) training center approved by the Skills Development Department under the Ministry of Human Resources.

Students will take 30% theoretical courses at the academy before going through 70% industrial training (1840 hours) at any Carsome inspection center in Malaysia. After graduation, the student is also guaranteed a job at Carsome.

The one-year course costs RM 8,000 and is fully refundable upon successful placement of a graduate and tenure with Carsome. Student loans are also available for students who wish to continue their studies there.

7 months after 2021, Carsome has taken another leap forward with its acquisition of iCar, bringing it to unicorn status. The combined entity will now tackle the US $ 55 billion digital automotive space in SEA, as explained by Patrick Grove, CEO of Catcha Group.

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From Carsome’s journey, it’s clear that the startup’s growth can be attributed to its team’s focus on finding and solving common issues in the used car segment.

They quickly identified an underserved segment and continually came up with solutions at different levels, improving their overall perceived value.

Now the decision to acquire iCar Asia consolidates Carsome as a player to face in the industry which already has others like Belimobilgue, Cardekho, Carmudi and, of course, its popular rival Carro, to name a few. only a few.

Carro had officially achieved unicorn status just a month ago after a $ 360 million Series C spin. Today, as used motor vehicle e-commerce transactions intensify in the region, Carsome still finds itself in an intense race with Carro for market dominance.

Meanwhile, Carousell is also making progress with its site’s automotive vertical. However, Carsome remains unfazed by the competition and is targeting $ 1 billion in revenue for 2021 following the acquisition.

Regarding the acquisition, Eric concluded, “This is the first step towards consolidation to form the largest digital automotive group in terms of revenue, user base, largest live roster and the best end-to-end processing capacity in the region.

  • You can read more about Carsome here.
  • You can read our previous Carsome coverage here.

Image Credit Featured: Eric Cheng and Jiun Ee, Co-Founders of Carsome

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