Heaptalk, Kuala Lumpur – As an online used car platform that provides efficient car selling services to individuals and entities, Carsome aims to be the 13th unicorn from South East Asia as they plan to list in the U.S stock exchange for $2 billion valuations. They either plan to list through a backdoor listing with a particular purpose acquisition company or via a conventional initial public offering.
Previously, Carsome followed the partnership with Catcha Group—controlled by tycoon Patrick Grove—overtaken Australian-listed rival iCar Asia private in a deal valued at $200 million. On the agreement, Carsome agreed to acquire 19.9% of iCar Asia from Catcha Group, the largest shareholder of ICar with a 30% stake, in a share swap that will make Catcha a shareholder of six-year-old Carsome.
Then, both parties had made a joint proposal to buy the remaining 80.1 percent in iCar from existing shareholders and become the independent directors of an online platform that connects car sellers and buyers in South East Asia. Then they commit to boosting the startup’s valuation to more than $1 billion.
Under a conditional and non-binding indicative proposal, Carsome will acquire all of the iCar common stock not yet owned by Carsome and its partners for 55 Australian cents (41 US cents) cash per share. This offer represents an 83.3 percent premium to last Friday’s close, of 30 Australian cents. iCar shares jumped 40 percent to 42 Australian cents in the stock exchange’s trade (13/7/2021).
“This is the first step toward consolidation to form the largest digital automotive group in Southeast Asia,” Carsome Chief Executive Officer Eric Cheng said in a virtual interview. “We visualize a platform that could deliver end-to-end solutions for anyone — from searching a car to buying and selling, finance, insurance, and after-sale services.”
Become the first unicorn from Malaysia
Following the share swap agreement with iCar Asia, Carsome was officially listed as the first unicorn from Malaysia to record a valuation of over US$ 1 billion. They also plan to reach more user acquisition, localized in Malaysia and penetrate beyond the geography in the South East Asia Regions, including Singapore, Philippines, Thailand, Vietnam, and Indonesia.
The future integration of both companies would allow consumers to research, sell and buy cars. As reportedly from the Carsome pers release, they will optimize more than the features of car financing, insurance, and after-sales service will be added in the future. Also, they will utilize AI (Artificial Intelligence) to provide a better experience to their users.
Carsome estimated that revenue from the combined super-app platforms is set to reach $1bn in 2021, with annual car transactions of around 100,000 units with over 10 million monthly unique visitors visiting the platforms.
Head rivalry on the race with Carro
Carsome’s leapfrogging as Malaysia’s first unicorn signifies a tight rivalry with Singapore-based startup Carro, which previously raised US$360 million led by SoftBank Vision Fund II, a funding round that pushed its valuation to over US$1 billion.
The most exciting thing is that these two young unicorn startups have identical business models to fight for the remaining Total Available Market (TAM) in South East Asia that is predicted more than $100 Billion.
Read also: Raises US$360M, Carro Becomes A First Automotive Marketplace Unicorn in SEA
Their business model is primarily helping customers buy and sell cars centers to tap into a customer base. Both company, however, has their standout unique values. Carsome has been more focused on serving the core experience of selling and buying cars by improving its inspection and pricing. On the other hand, Carro is more diversified, with measures such as insurance being customized according to customer behavior and usage patterns.
Aiming Indonesian market
In Indonesia itself, Carsome’s trend is also in line with its business growth. Delly Nugraha as Country Head of Carsome Indonesia, who was also appointed as President Director of PT Universal Collection, said that this investment is a strategic step for Carsome to open up more opportunities and networks in Indonesia.
“Through PT Universal Collection’s access to used car providers on the market, Carsome’s dealer partners will enjoy more diverse inventory and more choices. On the other hand, this will open up PT Universal Collection suppliers’ access to wider demand opportunities, thereby expanding their accessibility to the used car market,” said Delly Nugraha in an official statement.
Based on the Carsome Consumer Survey released in early 2021, Indonesian people’s interest in buying and selling used cars in the second half of this year is still relatively high. At least 64 percent of respondents expressed interest in buying a used car in the April-September 2021 period. They are optimistic that purchasing power will strengthen because they predict a more stable income and have an adequate budget.
