How Carsome can drive its way into the black

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Winter has truly arrived for Southeast Asia’s tech scene. Funding is slowing down, and not a day goes by where you don’t hear news of some company or another shedding staff. Heck, we’ve got three news bites about job cuts in today’s newsletter alone.

For many companies, layoffs are a painful but necessary step towards improving their finances, especially in this macroeconomic environment.

Malaysia-based Carsome is no exception. 2022 has been bittersweet for the used-car marketplace, which has gone through some highs and several lows. Still, the firm seems confident that it can hit breakeven in 2023 – which would certainly be good news.

Today we look at:

• Carsome’s road to being in the black
• A VC firm’s fourth fund
• Other newsy highlights such as more layoffs in the startup scene and a new Virtual Production Innovation Fund in Singapore

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The journey to the stars starts with used cars

Image credit: Timmy Loen

Carsome CEO Eric Cheng says that the firm is on track to breaking even in 2023. There are some factors in its favor, but several hurdles are also standing in its way.

• First, on 2022: The company has been through ups and downs this year. It raised US$290 million in a series E round, increasing its valuation to about US$1.7 billion, and beefed up its workforce. However, it had to shelve its dual-listing plans in Singapore and the US, and lay off staff at the end of September.

• Golden goose: A real opportunity for Carsome would be in the tech that powers its platform, with data on prices, stock availability, users, and transactions creating avenues that could be spun off, as well as its ability to facilitate inter-city sales. The company has also ventured into the digital banking space and can provide financing solutions for unserved and underserved markets.

• It won’t be so easy: Today’s macroeconomic environment will create challenges for Carsome, especially as investor appetite for high-growth companies declines. Additionally, the region’s used-car space is getting heated, with competitors like Singapore’s Carro and Indonesia’s Mobbi also making their mark.

Read more: Can Carsome break even in 2023?

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