Singapore-headquartered startup Carro, one of the largest online automotive marketplace for used cars in Southeast Asia, has joined the unicorn club after having raced past the $1-billion valuation mark due to the $360-million raise in a series C round led by SoftBank Vision Fund 2, the giant venture capital fund of Japan’s SoftBank Group, which is aimed at supporting its expansion into Southeast Asia. This news follows Carro’s $110-million raise in debt financing last year. Carro said that its latest financing round put the startup’s valuation at more than $1 billion, making it the first auto marketplace from Southeast Asia to achieve unicorn status in five years. Carro’s new investors include several prominent Indonesian-based funds such as East Ventures’ affiliate EV Growth. The startup competes with Carousell and Carsome in Southeast Asia. Carro, formally known as Trusty Cars Pte, plans to use the funds to strengthen its businesses, and to bolster its market position in Indonesia, Thailand, Malaysia and Singapore. The startup will also use the capital to expand its retail offerings and financial services, and to enhance beyond in-house loan financing, as well as accelerate the development of its AI capabilities. “This is a huge milestone for us,” Carro’s CEO Aaron Tan said, “we are grateful for the strong support from our investors, which reaffirms our belief in the transformative power of AI in the automotive industry to deliver exceptional customer experience. As digitalisation shapes the global landscape through new consumer habits and business practices, it is a very exciting time for an end-to-end online car marketplace like Carro.” Meanwhile, Softbank Investment Advisers managing partner Greg Moon said the firm was delighted to partner with Tan and the Carro team, supporting its ambition to expand into new markets as well as use AI-powered technology to make the car buying process smarter, simpler, and safer.

A corner in Carro’s showroom in Singapore

Carro is also reportedly preparing for a U.S. public listing that could take place in the next 18 to 24 months. Tan said that its valuation is “well over a billion dollars” without disclosing the exact figure. The startup is targeting an initial public offering in the U.S. within the next two years, Chief Executive Officer Aaron Tan said, “an IPO remains on the horizon for us, 18 to 24 months is achievable.” He added that the firm is on track to handle more than 200,000 used-vehicle transactions in 2021. It closed its financial year ending March 2021 with over a 2.5 times growth in revenue and continues to be EBITDA positive for the second year running. Carro was also named Asia Pacific’s fastest-growing company in 2021 by the Financial Times and Statista. Also thanks to startups like Carro and its Malaysia-based archrival Carsome, used-cars e-commerce is surging in Southeast Asia. In November 2020, Carro’s CFO Ernest Chew said that the startup’s growth throughout the previous year may be attributed to used-car sales, which saw a boost amid the financial crisis brought by the COVID-19 pandemic. Carro also announced that it is facilitating around $1 billion in gross merchandise volume on an annualised basis.

Co-Founder & CEO Aaron Tan of Carro

Founded in 2015 by Tan and two of his university schoolmates, Carro started as an online marketplace for cars, before expanding into more verticals. The startup aims to tackle the lack of transparency in Southeast Asia’s vehicle trading market. Co-Founder & CEO Aaron Tan divided the operations into three sections: wholesale, retail, and fintech. Its wholesale business works with car dealers who want to purchase inventory, while its retail side sells to consumers. Its fintech operation offers products for both, including B2C car loans, auto insurance and B2B working capital loans. The online platform allows customers and wholesale businesses to be provided with services for all aspects of car ownership, from buying and selling cars with a pricing algorithm that locates the best deals to financing solutions to after-sales services. It also offers insurance and financial services such as loans for second-hand cars. Its group of companies includes financial services unit Genie, Malaysia-based car bidding platform myTukar, and consumer-to-consumer marketplace Jualo. Carro said it’s the first company in Singapore to launch a subscription-based car service. It also claims to be the city-state’s first contactless vehicle purchasing service by enabling its buyers and sellers to maintain social distancing during the buying process. As of June 2021, Carro has raised over $470 million from SoftBank Vision Fund 2, EDBI, Mitsubishi Corporation, MS&AD Ventures, Insignia Ventures Partners, and B Capital Group. SoftBank has also been backing Carro since its venture capital arm SoftBank Ventures Asia first invested in the startup in 2016.

Sources of information include Tech In Asia, Nikkei Asia, and Reuters.