Unicorn Carsome prefers Malaysia over US for future IPO

Carsome, the Malaysian used-car trading platform, hopes to go public in the next two years.

The company is preparing to be IPO-ready from a financials, governance, and team perspective, CEO and co-founder Eric Cheng said at the Tech in Asia Conference in Kuala Lumpur.

Carsome CEO and co-founder Eric Cheng speaking at the 2024 Tech in Asia Conference Kuala Lumpur / Photo credit: Tech in Asia

Many tech companies choose to list in the US, even if their businesses are not located there, because the country’s exchanges offer the deepest liquidity pools as well as analysts and investors who have a better understanding of growth companies.

This should enable tech firms that list there to garner higher valuations and raise more capital, which has attracted Southeast Asian players like Sea Group and Grab to list stateside in recent years.

Yet, Cheng shared that Carsome would consider listing on Bursa Malaysia, the country’s stock exchange, although no decision has been made.

“We are looking for liquidity, investors who can appreciate the business, and who will be there for the long-term,” said Cheng, who also revealed that the platform is on track to earn US$20 million in EBITDA this year.

Malaysia on a roll

Bursa Malaysia has certainly been on a roll recently. So far, it has seen 27 debuts this year, which raised a total of US$723 million. This is 43% higher than the amount raised over the same period in 2023.

This comes even as IPO activity in Asia Pacific is “subdued,” with deals and proceeds in the first quarter of 2024 falling by 34% and 56%, respectively, compared to the same year-ago period.

In addition to Carsome, other Southeast Asian startups represented at the Tech in Asia Conference that are contemplating going public include insurtech firm Sunday and online lender Julo.

Why might it make sense for Southeast Asian startups to list in an Asian market?

Cheng noted that “Bursa is becoming the most vibrant exchange in the region,” with some companies that have listed there providing valuation multiples “that can rival what you are seeing in other markets, even the US.”

There is also a home ground advantage to listing on a local exchange. According to Cheng, it is “very helpful” that Carsome is home-grown, since this means that Malaysian retail investors “understand what we do,” with some even having used its services.

Ankur Mehrotra, group president of Julo, also brought up “whether US investors would be excited” by a foreign name they are unfamiliar with.

Lack of local comparables

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