Carro eyes $100m pre-IPO raise to push valuation to $1.5b

Photo credit: Carro

Used-car marketplace Carro plans to raise around US$100 million as it gets IPO-ready, possibly bringing the firm’s valuation to over US$1.5 billion, CEO Aaron Tan said in an interview with Bloomberg.

Tan said in the interview that while the Singapore-based firm was raising funds, “we are ready for an IPO.” He clarified, however, that the decision to list will depend on the broader macro environment.

Carro plans to raise the funds over the next six months, Tan told Tech in Asia. It will mainly use the funds for market expansion, with M&A deals in Hong Kong and Japan taking the bulk of the proceeds, he added.

While the raise could boost investor trust for the upcoming listing, setting the stage for an IPO extends beyond regional platform dominance, according to Yinglan Tan, founding managing partner at Insignia Ventures Partners – an early investor in Carro.

Hence, it is “important that Carro wins a few more markets in Asia Pacific,” Insignia’s Tan told Bloomberg, adding that the used-car marketplace has the potential to grow big in Hong Kong and Japan.

Hong Kong’s automotive market has recently shown signs of recovery from the Covid-19-induced downturn in 2020, bolstered by its geographic advantage and government support, among other factors. In Japan, meanwhile, the industry logged a 27% growth year on year in the first half of 2023.

Carsome, Carro’s Malaysia-based rival, has also been making moves ahead of its anticipated IPO, recently reorganizing its leadership team.

Over the past nine years, Carro and Carsome have poured hundreds of millions of dollars into acquiring inventory and establishing delivery networks, among other internal investments.

Such initiatives have helped Carro post an EBITDA of US$33 million in FYE 2024, a substantial jump from US$4 million in the previous year.

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