The company foresees continued dynamic growth across South-East Asian markets

by RAHIMI YUNUS

CARSOME Sdn Bhd is working on several major mergers and acquisitions (M&A) to strengthen its pole position in the regional car e-commerce marketplace as part of its plan to expand its presence in Malaysia, Indonesia and Thailand.

Co-founder and group CEO Eric Cheng said the company foresees continued dynamic growth across South-East Asian markets, driven by growing used cars demand and digital transformation in the automotive industry.

“We continue our focus in expanding South-East Asia’s largest integrated car e-commerce platform more deeply and widely across Malaysia, Indonesia and Thailand in 2021 while strategically maintaining our leadership position across the region.

“We are also closing a number of major M&A transactions in the near future, which we will announce in due course,” Cheng told The Malaysian Reserve.

He did not comment on its proposed US’ IPO plan but said official announcements would be made once the company has firm and finalised details.

Carsome is weighing going public in the US through a special purpose acquisition company (SPAC) as an option besides a conventional IPO, Bloomberg reported quoting sources.

A SPAC often called a “blank-cheque company”, raises capital through an IPO, which is then used to acquire one or more existing target companies.

Carsome was said to be working with advisors and is seeking a valuation of about US$2 billion (RM8.33 billion) in a listing, poised to make the company Malaysia’s first unicorn.

The used-car platform provider was reportedly conducting a pre-IPO funding round that aims to raise about US$150 million.

As it is, Cheng said the company has surpassed all its growth targets and is on track to exceed US$1 billion in annualised revenue by the third quarter of 2021 (3Q21).

“Carsome is growing from strength to strength. As of June 2021, we are transacting an annualised 100,000 cars per month with a transaction volume of over US$800 million, more than double ahead of our closest competitor,” he said.

Cheng said used cars are more in demand, with more consumers opting for private car ownership amid the Covid-19 pandemic.

Additionally, he said the second-hand car market had experienced a surge in online sales from increasingly digital-savvy consumers on the back of the digital transformation of the automotive industry in South-East Asia.

In May, the company partnered Axiata Group Bhd’s Aspirasi, a micro-financing and micro-insurance provider under Axiata Digital Services Sdn Bhd, to offer data-backed digital financing solutions to used car dealers in Malaysia.

It has also set up a data centre of excellence to revolutionise the used car industry through digitalisation and to empower decision-making in business.

Carsome ranked 16th in the FT Asia-Pacific High-Growth Companies 2021 list, the only Malaysia-based company in the top 50, with a 191.9% compound annual growth rate (CAGR).

Malaysia’s next-best high growth company, Supplycart Technologies Sdn Bhd, a cloud-based electronic procurement solution provider, ranked 70th with a 103.6% CAGR.

Carsome’s archrival Singapore-headquartered Carro topped the chart with a 422.4% CAGR.

Carro targets a US listing within the next two years and recently raised US$360 million led by SoftBank Vision Fund II for expansion in Thailand and Indonesia.