Rocket Internet’s car classifieds site has been struggling in Vietnam

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Traffic in Ho Chi Minh City. Fram is betting on significant demand for new and used cars and motorbikes with its acquisition of Carmudi.vn. Photo credit: xuanhuongho / 123RF.

The Vietnam branch of Carmudi, a Rocket Internet-backed group of car classifieds sites, has been acquired in a cash-only deal worth US$50,000.

According to buyer Fram, Carmudi.vn had a turnover of close to US$190,000 between January and September this year, but made a loss of more than US$506,000. In 2016, it made US$169,000 with a loss of US$518,000. The site had around 1.1 million organic page views in September 2017.

Fram – a Swedish-Vietnamese IT service provider and venture builder which listed on Stockholm’s Nasdaq First North exchange last month – has obtained a 95 percent stake in Carmudi Vietnam as a result of the purchase. The deal gives Fram rights to use the Carmudi brand indefinitely in Vietnam, including ownership of the “carmudi.vn” domain, and a license to conduct marketplace-based ecommerce in the country. 

Fram confirmed to Tech in Asia that it intends to use the license to build additional ecommerce businesses in the country.

Rocket powered

Germany-based incubator Rocket Internet established Carmudi in 2013 as an online marketplace for new and used vehicles in some of the world’s fastest-developing markets.

Buyers and sellers can post and search classifieds on the portal, with revenue mainly coming from advertising fees and the sale of ad space.

We should be able to operate the business at around a quarter of previous running costs.

Local versions of Carmudi have been launched in countries including Bangladesh, Indonesia, Myanmar, Pakistan, and the Philippines, and outside the Asia-Pacific in places like Mexico and Saudi Arabia. In some cases, Rocket rebranded existing classifieds sites under the Carmudi name. Carmudi.vn launched in 2014.

Carmudi raised US$10 million funding in April 2014, and a further US$25 million the following February.

At the time of that second fundraise, Carmudi said that it had a growth rate of over 50 percent across all of its 20 markets, seven of which were in Asia.

“We are on track in all our markets,” co-founder and global managing director Stefan Haubold said at the time. “In general, we are gaining ground in those markets where people have the financial means to buy and sell cars and motorcycles, and there is ample infrastructure in place. Political and economic stability plays a great role as well.”

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