KUALA LUMPUR (June 5): Carsome, Southeast Asia’s largest consumer-to-business (C2B) used car platform, has received funding of US$6 million in a round led by Shanghai-based venture capital firm Gobi Partners.
Other investors in the round include Lumia Capital, Innoven, and existing investors 500Startups and Spiral Ventures.
In a joint statement today, Carsome and Gobi Partners said the used car platform plans to use the new funds to further expand regionally, while launching more inspection outlets across the four countries, with a primary focus on Indonesia, Malaysia and Thailand.
"All three countries are, in fact, the largest car markets in Southeast Asia, with a total of 3.5 million used car transactions conducted per year. Thus far, Carsome has five locations spread out among the four countries and hopes to double this amount by the end of 2017," they added.
Carsome and Gobi Partners said Carsome’s choice of investors for this round stems from a decision to work with a global investor syndicate that carries extensive knowledge of the industry. For example, Gobi Partners invested in Chezhibao in China, which recently raised a US$100 million round, while Lumia Capital invested in Instacarro in Brazil.
"Gobi Partners was a follow-on investor in the previous round for Carsome, but has now taken the lead role, based on their conviction, as well as their faith in both the team and the business," they said.
“The C2B model that Carsome emphasises on, makes a lot of sense, especially in emerging markets like Southeast Asia, because there is not enough data that enables trust between consumers," said Gobi Partners vice-president of investment for Asean, Victor Chua.
"Carsome provides a de-risking element for both sides of the equation — the sellers who are generally individuals and buyers who are dealers. Moving forward, we will be helping the company to look for more strategic partners and investors, to build on the strong fundamentals Carsome has,” he added.
IdeaRiverRun, another early investor in Carsome, is also optimistic about Carsome's future.
"The new strategic investors [that] Carsome has for this round will bring about immense business opportunities in new markets for Carsome. In fact, they could potentially become another success within the region, like ride-hailing company Grab," its chairman Tan Sri Vincent Lee said.
The used car industry in Southeast Asia is currently highly fragmented and inefficient, with an estimate of US$30 billion per year in used car sales. Carsome takes on these problems by providing a platform that was built by an in-house tech team — one that provides users with an easier way to sell their cars and to connect with dealers — seamlessly.
Carsome’s monthly revenue has increased by 12.5 times since its previous fundraising round and its annualised gross revenue stands at US$30 million. The company has also grown its staff strength from six in Malaysia to over 100 in Malaysia, Singapore, Thailand and Indonesia.