Carro’s next pit stop? Recruitment services

Over the past two years, used-car unicorn Carro has acquired a couple of car-related businesses. It bought a 50% stake in Indonesian-based Mitra Pinasthika Mustika Rent in 2022 and acquired Hong Kong-based Beyond Cars early this year.

But a third deal – the acquisition of Thai classified ads platform Kaidee in 2023 – will lead the firm to a completely new vertical: recruitment.

Carro founder and CEO Aaron Tan (second from right)/ Photo credit: Carro

Carro founder and CEO Aaron Tan tells Tech in Asia that the team behind Kaidee is set to launch OKAI, a new jobs platform based in Thailand. OKAI will be spun off as a separate entity and is in the final stages of securing its own venture funding.

According to Kaidee CEO Jake Goh, who will also lead OKAI, the jobs platform is looking to raise about US$8 million.

It’s a curious move for IPO-bound Carro – used cars and recruitment aren’t an obvious match at first glance.

From cost center to revenue center

Tan confirms that Carro acquired Kaidee in 2023 for an undisclosed amount. While the classified ads business complements Carro’s marketplace, Tan saw its potential to expand into recruitment, which Carro can leverage for its HR needs.

“We have about 5,000 employees at Carro, which means I’ve spent so much money on recruiting. So from my standpoint, it is a difference of turning the recruitment [department] from a cost center into a revenue center,” he says.

It’s unclear how much Carro could save by working with OKAI. Tan did not disclose specifics about Carro’s recruitment spending, but the company’s latest financial statements reveal that office and administrative expenses were US$1.2 million in 2022 and US$2.8 million in 2023.

See also: Carro posts 67% revenue jump in FY 2023, generates positive adjusted EBITDA

While the dollar values are substantial, they make up just 2% of Carro’s total operating expenses for both years.

Despite the timing of the job hiring platform’s launch, which is expected to be ahead of Carro’s market debut, Tan says OKAI and Kaidee are not part of its IPO play. After the jobs platform’s launch, Tan says he intends to “deconsolidate” Kaidee – and, in turn, OKAI – from Carro.

The Carro CEO adds that following this, its ownership of Kaidee will amount to less than 50%, letting it be a “traditional venture-backed business.”

Still, Yinglan Tan, managing partner of Insignia Ventures Partners, one of Carro’s first investors, is convinced that the Kaidee deal builds on a strategy that the used-car marketplace has long wielded – boosting market share through related industry acquisitions.

Can OKAI fly?

Tough competition ahead