Singapore Press Holdings (SPH), a public-listed media company in Singapore, announced yesterday that it has purchased online car portal sgCarMart for SGD 60M (USD 48M), a significant amount in the country’s digital publishing and media sector.
While the price is pegged at SGD 60M, the final valuation will ultimately depend on performance targets. The three founders will continue to work on the business after the acquisition, and Vincent told the Straits Times that the deal will help it “grow in breadth and in depth”.
SPH has, on behalf of the founders, declined an interview request with SGE about the acquisition and the team’s plans with regards to contributions to the startup ecosystem.
SgCarMart operates a variety of businesses, including vehicle classifieds, a car auction platform, an online marketing site, as well as car loans, insurance and settlement services. Existing shareholders in the company include JDB Investment, Goh Cher Ngann, Ong Poh Huat, and co-founders Henry Seah, Tan Jing Lun, and Vincent Tan.
JDB Investment is a holding company involved in a group of .com businesses in Asia. It previously ran jobs portal site JobsDB.com before selling it off to SeekAsia. Its portfolio includes 88DB.com, Openrice.com, StreetDirectory.com, Cozycot.com, and FlowerAdvisor.com.
Vincent is the managing director of sgCarMart, which was founded in June 2004 while he was still a mechanical engineering undergraduate at the National University of Singapore.
Finding the prospects of an engineering career to be grim, Vincent and Henry weighed between giving tuition and starting a business. They settled on the latter, and also realized then that there were no strong online car portal players in the Singapore market. Jing Lun was roped in to round out the team.
Originally a car classifieds service, the startup managed to break even when they graduated in 2007, which meant they were able to pay themselves at a reduced salary of less then SGD 2,000 a month. They had reached critical mass as car dealers became more receptive to listing their cars online.
The company has since grown from a three-person team to more than 60 staff, and claims to capture 90 percent market share in Singapore’s online vehicle classifieds business. By March 2012, it had an annual revenue of SGD 5M with over 10,000 listings on its site. As a result, sgCarMart has been recognized as the top 300 most profitable SMEs in Singapore by the SME 1,000 rankings.
It has expanded into Indonesia since last year as a testbed, offering car listings, editorial content, and after-market products directory. It received a SGD 100k grant from government agency IE Singapore for that very purpose. It has also received grants from the Infocomm Development Authority of Singapore that is between SGD 30k to SGD 100k.
At this point, it is unclear what will happen to the company’s regional expansion plans post-merger. But what seems likely is that SPH’s very own car portal, STCars, could dissolve into sgCarMart.
SPH appears to have been active in investing and acquiring tech businesses of late. Last month, it led a USD 2.5M investment round in Chope, a Singapore restaurants booking site.
Of course, the media giant is no stranger to buying up online portals. In 2006, it purchased hardware forum and tech publishing company HardwareZone for USD 4.5M. Two year later, it bought fintech and media company ShareInvestor for SGD 12M.
Overall, the entrepreneurial community is positive about this development, which could improve venture capitalists’ perception of Singapore. The high valuation has certainly come as a pleasant surprise among investors I spoke to.
It remains to be seen how active the founders will be in mentoring and recycling their money in the startup scene, either as angel investors or serial entrepreneurs.
But Murli Ravi, head of South Asia at JAFCO Asia, writes in his blog that the acquisition “should encourage other young and less young entrepreneurs to strike out on their own. This was a true-blue, homegrown (non-transplanted), bootstrapped start-up. Kudos and more kudos.”
Special thanks to Sharon Lourdes Paul for the tip-off.