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The question of growth vs. profitability seems to be one that startups are constantly navigating. I think it’s safe to say that “growth at all costs” is a thing of the past, but growth in itself is still important. At the same time, companies need to show that they’re able to make money and, ideally, prove that they can make more money than they spend.
Growth and profitability can sometimes be a balancing act, and there are times when a company will trade one for the other. For used-car marketplace Carro, it chose profitability for its latest financial year, but that’s just part and parcel of the firm’s larger story.
Today we look at:
- Carro’s FY 2024 results
- An Indian edtech firm that’s raised seed money
- Other newsy highlights such as Malaysia’s new national office for AI and Coincheck’s listing on Nasdaq
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Ready, set, Carro
Image credit: Timmy Loen
Carro’s results for the financial year ending March 2024 look promising. The firm cut its operating losses by 92% year on year, and while it posted a decline in revenue growth, that came with an improvement in gross profit margins.
- The reasons why: The company attributes these results to a focus on “growth on higher-margin revenues” and changes in its “geographical mix.” Carro is also moving beyond just buying and selling cars and focusing on “ecosystem-led” services like car financing, maintenance, and insurance, which lead to increased profit margins.
- Challenges in the market: The used-car marketplace sector has been on a roller-coaster ride over the last few years, as rising interest rates have caused investors to be more cautious. A shortage of new cars also led to more people buying used cars instead, making consumers less able to afford them.
- The IPO question: While a listing is definitely on the cards for Carro, it feels that the current IPO environment continues to be “very weak and fragile.” The company says that it will “continue to watch” the market for the time being.
Read more: Carro swaps growth for profitability, as losses fall 92% in FY24
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Money matters
Image credit: Timmy Loen
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