A startup profits from an “unprecedented” demand for used cars

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Hello readers,

Here’s how I’ve spent the last nine months: Scrolling through TikTok and binging on The Haunting of Bly Manor on Netflix. But while I was busy being a couch potato, Carro was busy breaking records. The used-car platform saw a 500% year-on-year growth in revenue in September, and has been EBITDA positive in the last three quarters.

Today we look at:

• Carro’s supergrowth amid the pandemic
• Ant Group’s blockbuster IPO getting halted
• Other newsy highlights such as Microsoft’s plan to invest in Bukalapak and a Chinese cosmetics unicorn’s IPO plans

PREMIUM SUMMARY

Carro comes through in the clutch

The Singapore-headquartered company has had a pretty good year (compared to many of us who just want 2020 to be deleted): Besides raising US$110 million recently, Carro has also reached profitability this year.

• Fueling the growth: With the current economic uncertainty, people are more likely to choose a used car over a new one to save money. On top of that, countries such as Indonesia and Thailand have already been seeing high growth in used cars due to their low car ownership rates.
• Not hitting the brakes yet: Carro’s grand plan is to hit 2x to 3x revenue growth and S$1 billion by 2022 through its “Alibaba for cars” ecosystem model – and Indonesia and Thailand are its key markets to reach this goal.
• Obstacles in the way: But it’s not going to be easy. Without factoring in revenue from financing or after-sales services, Carro’s margin from car sales (for the financial year ended March 31, 2019) was less than 2%. In addition, growing in both Indonesia and Thailand is going to be tough with the two countries’ differing consumer behaviors and market characteristics.

Deep dive into the full analysis: Fast-growing Carro says it’s been profitable for nine months

NEWS SPOTLIGHT

Ant Group’s IPO no more