Carsome raises $19m as Southeast Asia’s used-car market revs up

Carsome co-founder and CEO Eric Cheng / Photo credit: Carsome

Malaysia’s Carsome has raised one of the country’s largest-ever series B rounds, securing US$19 million to strengthen its position in Southeast Asia’s ultra-competitive market for used vehicles.

Burda Principal Investments – the VC arm of German media company Hubert Burda Media – led the round. Existing Carsome investors Gobi Partners, InnoVen Capital, and Lumia Capital followed on.

This follows a US$6 million Gobi-led investment in June last year, and a US$2 million series A round in March 2016 backed by 500 Startups, Malaysian private equity firm IdeaRiverRun, and Japan’s IMJ Investment Partners.

Carsome co-founder and CEO Eric Cheng told Tech in Asia that the new funds would be deployed to hire new talent and expand regionally, with a focus on Indonesia and Thailand.

Tech in Asia data suggests this is Malaysia’s second-largest series B fundraise to date, behind the US$45 million raised by content streaming service iFlix in March 2016.

Consumer-to-business

Launched in February 2015, Carsome started as a price comparison site for new cars. Following an injection of US$350,000 in seed funding the following August, the Kuala Lumpur-based startup shifted direction to tap demand from buyers and sellers of second-hand vehicles.

It established a “consumer-to-business” (C2B) platform that allows car owners to sell their vehicles to dealers online, with the possibility of getting the whole process – including legal transfer of ownership and payment – completed within one day.

Vendors can use the platform to check car valuation data, allowing them to set a realistic price and get the best deal they can. Dealers then make offers on listed vehicles through a bidding system.

Carsome also has its own team of vehicle inspectors that appraise second-hand cars before they are advertised on its platform.

We are on track to hit break-even point by early 2019.

The market appears to have responded positively to Carsome’s approach to trading used vehicles.

The startup said in a press release that its monthly total transaction value has increased more than fourfold since the start of 2017, with total car sales through its platform quadrupling over the same period.

A growing opportunity

Crowded field