Carsome parks IPO for now, focuses on accelerating profitability

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Hello reader,

Growing up in Singapore, which has a relatively efficient and comprehensive public transport system, I never really saw the need for owning a car – even more so since Uber introduced ride hailing to the world over a decade ago.

This was reinforced by how expensive cars are in the Lion City. Thanks to high import taxes and having to buy a certificate of entitlement (giving one the right to vehicle ownership for 10 years), a new Toyota Camry can set you back by as much as S$220,000 (US$163,000).

However, after adopting a dog in July, I have had second thoughts about owning a car lately. Singapore isn’t the most pet-friendly country – pets are not allowed on public transport. This means a lot of money spent on taxis and Grab, which charges a premium for its GrabPet service.

So I find myself browsing through the websites of companies like Carro recently to see how much cheaper a used car might be – spoiler alert: They’re still pretty expensive!

One website I did not look at was Carsome, which my colleague, Emmanuel, has written about in this week’s featured story.

This was not because I have anything against the Malaysia-based unicorn but because Carsome’s Singapore website only offers to buy used cars, not sell them.

But the company is one of the major players in Southeast Asia’s used-car space, with a valuation of US$1.7 billion and potential revenue that is several times that – you’ll have to read the article to find out exactly how much!

Yet things have not been completely smooth sailing recently: Carsome had to lay off staff at the end of September despite having a three-year cash runway, as Emmanuel shows in his article.

The company also reportedly shelved its plans for a dual listing, which was set for this year, in Singapore and the US.

CEO and co-founder Eric Cheng tells Tech in Asia that while Carsome is “capable of going public,” it “doesn’t really make sense” to do so at the moment given market conditions and economic headwinds.

If and when the company decides to pull the trigger, the upside may be that the company will be in a stronger financial position.

Similarly, I’ve decided to hold off on buying a car for now amid volatile market conditions. But I might reconsider my decision when the tide turns.

— Simon

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THE BIG STORY

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3 Trends to keep an eye on

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2 Eye-popping facts

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The ones you didn’t see coming

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