M’sian used car site becomes unicorn after acquiring iCar Asia – Health Guild News


As of July 13, 2021, Charger becomes the first technological unicorn based in Malaysia after acquiring 19.9% ​​of iCar Asia Ltd (iCar) listed in Australia on Catcha Group.

Disclaimer: Since Grab (then MyTeksi) was founded in Malaysia, there has been some discussion about whether the title of “Malaysia’s first unicorn” actually belongs to Grab, which is now headquartered in Singapore. However, the purpose of this piece is not to debate who owns the title, but to look back at Carsome’s successes.

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

In return, Catcha Group will become a shareholder in Carsome, bringing the startup’s valuation to more than US $ 1 billion.

During its 6 years of activity, Vulcan Post has documented key parts of Carsome’s journey since 2015. This latest development marks another point in the Malaysian startup belt and we thought it appropriate to take a look at how it has been developed his journey.

2015: almost 200 transactions within 4 months of launch

Carsome was launched in February 2015 with the aim of becoming a one-stop shop to discover and compare the best prices for different cars from various dealerships.

The Carsome Team in 2015 / Image Credit: Carsome

It worked closely with distributors to ensure that its users could enjoy the benefits exclusively and that their efforts bore fruit.

Within four months of its creation, it had already helped users save a cumulative total of RM 500,000 of all transactions. At the time, co-founders Eric Cheng and Jiun Ee shared that Carsome users were able to save up to 3,000 RMS from the retail price per car.

In its first round of funding in August 2015, it did raised US $ 350,000 of 500 startups and IdeaRiverRun (IRR), and announced that it had already done so formed partnerships with 100 dealers in the Klang, Johor and Penang valleys.

2016: dealing with the segment of the used vehicle market with little attention

But it wasn’t long before Carsome set out on a segment that needed more help. With just over a year, Carsome then pivoted i entered the used vehicle market.

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

Eric told Vulcan Post in 2016: “The introduction of our exclusive pricing data based on real transactions was the key to the company’s growth. The prices of used cars vary a lot, and the market value of used cars was difficult to assess.

To overcome this, the site entered a file online car appraisal service and provided 162-point car inspections, which he claimed was the first and only one he did at the time.

Through these services, users could put their favorite cars in their bidding system. From here, more than 200 dealers across Malaysia would determine the best price for the car.

Since early 2016, Eric shared that they had experienced exponential revenue growth and that they had one compound monthly growth rate of 62%.

Dictionary time: The compound monthly growth rate (CMGR) is the average long-term growth from one month to the next, typically 6 to 18 months. A 20% CMGR is already considered exponential.

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They also served one average of 200,000 users who bought and sold cars on the spot and had passed the mark of 1,000 cars sold annually. By now, Carsome Singapore had also started operating.

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

2017: Gross annual revenue of US $ 30 million

In June 2017, Carsome raised funding of US $ 6 million in a round of the A2 Series led by Gobi Partners. Its monthly revenue had increased 12.5 times since its previous round of funding in 2016.

Meanwhile, its gross annualized revenue stood at US $ 30 million. By now I also had one multiregional presence in 4 markets: Malaysia, Singapore, Thailand and Indonesia. In total, they worked with more than 500 distributors.

2018: Series B funding of US $ 19 million and suggestions for a future IPO

In March 2018, Carsome announced Series B funding. raised $ 19 million of a mix of global investors based in Europe, China, USA, 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 the participation of Gobi Partners, InnoVen Capital and Lumia Capital.

After the funding round, Eric had hinted at the possibility of a IPO over the next 3-5 years, but concluded that they would focus first on growing the company.

Carsome also said it would be an introduction verticals of new products such as financing and guarantees to benefit both vehicle dealers and customers.

Later, in a Series B2 funding round raised US $ 8 million. By the end of the year it had already surpassed the mark of 10,000 cars are traded annually.

2019: Establishment of Carsome Capital

Carsome established Carsome Capital in 2019, which offers advice and solutions to obtain and apply for financing, insurance and other related services for the purchase and sale of motor vehicles.

The same year, he announced one collaboration with Funding Societies Malaysia, SEA’s largest P2P funding platform. Together, they offered financing to the dealer, which helped local dealers buy used vehicles.

Through the collaboration, an estimated 1,600 car dealerships would have benefited from a total funding amount of US $ 200 million.

The end of 2019 saw an increase of one Series C. US $ 50 million round comprising a combination of equity and debt investments of new and existing investors. At that time, they passed the mark of 40,000 cars are sold annually.

2020: launch of its B2C segment with a flagship store

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

In May 2020, Carsome also launched its RM 55.5 million dealer alliance support program. This initiative provided short-term boosts in bonus forms and lines of credit to help used vehicle dealers rebuild their businesses and finances after MCO.

A little later, in August 2020, the official launch launched its B2C segment along with 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 the used vehicles that interested them through the site, after making an online booking. If users were satisfied with their choice, they could make a purchase with Carsome by managing financing, transfer of ownership and even loan applications as needed.

In November 2020, Carsome got its 100,000th used car seller, and a month later, he announced that he had raised one Round Series D. US $ 30 million.

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

January 2021 was when Carsome officially announced that it had set up its first technical institution in Malaysia, Carsome Academy.

Its aim is to provide technical education to Malaysian youth and guaranteed professional opportunities. The institution is one National dual exercise system (SLDN) training center accredited by the Skills Development Department of the Ministry of Human Resources.

Students will spend 30% of the theoretical classes at the academy before completing 70% of industrial training (1,840 hours) at any Carsome inspection center in Malaysia. After graduating, the student is also guaranteed a job at Carsome.

The one-year course costs RM 8,000 and can be fully reimbursed if a graduate is successfully placed and owned by Carsome. Student loans are also available for students who want to continue their studies there.

After 7 months in 2021, Carsome has made another leap with the acquisition of iCar, which takes it to unicorn status. The combined entity will do so now dealing with US $ 55 billion digital space for automotive at SEA, as shared by Patrick CEO, CEO of the 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 concentration in finding and resolving common pain points in the used vehicle segment.

They were quick to identify a poorly served segment and continually offered solutions at various levels, improving their perceived overall value.

Now, the step to acquire iCar Asia cementes Carsome as a player that will have to fight in the industry that treats it already full of others like Belimobilgue, Cardekho, Carmudi and of course the popular rival Carro too, to name a few.

Carro had officially achieved unicorn status just a month after one URound Series C. $ 360 million. Now, as second-hand vehicle e-commerce transactions increase in the region, Carsome is still locked in an intense race with Carro for market dominance.

Meanwhile, Carousell is also climbing with the automotive vertical of its place. However, Carsome remains unperturbed by competition and aims for revenue of US $ 1 billion in 2021 after the acquisition.

From the acquisition, Eric concluded, “This is the first step toward consolidation to form the largest digital automotive group in terms of revenue, user base, largest live listing and the best compliance capacity of the entire territory in the region.”

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

Featured Image Credit: Eric Cheng and Jiun Ee, co-founders of Carsome

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