Pedal to the metal for Carsome’s revenue figures

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Hello reader,

I’ve been so addicted to Shark Tank lately that it’s almost disturbing. I used to think that it was a show with a panel of rich business people making fun of ordinary folks talking about big numbers – much in the vein of many American reality television programs.

But after clicking on clip after clip on YouTube, I’ve realized that there’s so much more depth to Shark Tank, and I just can’t seem to stop watching.

I write about startups every day, so this has been extremely relevant to me. I often wonder what the firms I cover would do if they were to pitch on the show. Would they get an investment? Or would Kevin O’Leary give them a smackdown instead?

The sharks like to ask about a company’s sales and revenue to determine whether it’s worth putting money in. If Carsome – the Malaysia-based firm in today’s story, were on the show, those figures would surely pique their interest.

Today we look at:

• How Carsome has more than doubled its revenue
• An Indian fintech firm that got US$3 million in pre-series A funding
• Other newsy highlights such as an Indonesian car-parking app making an investment into an AI firm and SoftBank cutting the headcount of its Vision Fund unit.

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Rising revenue

Image credit: Timmy Loen

I was a terrible economics student in junior college, but I distinctly remember learning about the law of diminishing marginal returns. It’s always at the back of my mind whenever I think about larger companies: How do they consistently grow despite already pulling in hundreds of millions in revenue each year? Carsome is a company that’s managed that.

• Fire burn and cauldron bubble: “Doubling revenue” is probably something that every founder wants to hear. And for Malaysian used-car unicorn Carsome, it’s become a reality. It recorded US$656 million in revenue for the financial year endingDecember 31, 2021, more than double the previous year’s figure of US$327.2 million.
• Cue dramatic crash zoom: Despite the good news, it’s also important to note that the company saw its losses grow by over 7x to US$138.6 million. Still, it’s not necessarily alarming: Most of its expenses came from fair value adjustments that are non-cash expenses and unrelated to operating performance, a Carsome spokesperson said. Excluding those numbers, its operating EBITDA for FY 2021 is in line with the previous year’s EBITDA margin.
• I’ll make you an offer: Ahead of a potential US listing, Carsome has put a lot of effort into scaling up. It expanded its Malaysian office and acquired three entities this year: auto classifieds firm iCar Asia, social media platform WapCar, and car dealership CarTimes. It’s also launching three additional refurbishment facilities – designed for reconditioning existing vehicles – by the end of 2022 to meet demand in Indonesia and Thailand.

Read more: Carsome doubles revenue in FY21, though losses widen

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