KUALA LUMPUR: Used car trading platform Carsome Sdn Bhd will allocate roughly 40 per cent from US$50 million in Series C funding raised recently for its Malaysia and headquarter operations.
"The investment would be used for the enhancement of our tech infrastructure, research and development (R&D) to improve the user experience for both buyers and sellers, expansion of our inspection centres as well as to beef up our financing business," co-founder and chief executive officer Eric Cheng told The New Straits Times.
Carsome raised the funding from strategic global investors and banks include Japan’s MUFG Innovation Partners, Daiwa PI Partners, Endeavor Catalyst, Ondine Capital and other undisclosed new investors to expand its market leadership in Southeast Asia.
The fund raising also includes participation from existing investors Gobi Partners and Convergence Ventures.
Further, the new financing will strengthen regional market leader in the auto trading ecosystem through strategic partnerships offering the whole suite of value-added services including car loans, dealer financing, warranty and insurance.
The capital injection will also greatly accelerate the launch of Carsome’s direct-to-consumer brand in collaboration with its dealer network through management and technology key hires.
"We are delighted and encouraged by the support of our global investors in our Series C round.
"They share in our vision to revolutionise Southeast Asia’s used car industry by establishing and upholding a new standard of quality assurance and through the better use of transactional data.
"We aspire to be the Visa/Master network of auto transactions, and build a collaborative ecosystem of partners to provide the best experience to consumers in Southeast Asia," Eric said.
In March 2018, prior to the Series C funding, the company raised US$19 million in Series B funding and this following Series B of an additional US$8 million extension round was raised in August 2018.
Last month, Carsome announced partnership with Funding Societies Malaysia, the largest peer-to-peer (P2P) financing platform, by providing a total financing amount of US$200 million (RM840 million), which potentially benefit 1,600 used car dealers under Carsome in Malaysia.
Carsome is Southeast Asia's leading used car trading platform with strong market leadership in Malaysia, Indonesia and Thailand.
Further, Carsome has over 700 employees across its Southeast Asia offices and it is operationally profitable in Malaysia and targets profitability
in the remaining markets by end-2020.
With over 40,000 cars transacted annually, Carsome has totalled more than US$300 million in transaction value to date.
Carsome's plans for regional expansion and growth in a market is valued at US$40 billion.
When asked on Malaysian operations, Eric said its Malaysian side currently has more than 5 per cent share of the annual local used car market which is valued at less than US$3 billion.
"We are looking to scale this up to more than 10 per cent in the coming year," he said.
As part of the strategic investment, Carsome will collaborate with MUFG and its subsidiaries in Southeast Asia to support Carsome’s vision of driving the automotive industry forward, by providing integrated financing access for dealers and consumers via Carsome’s platform.
MUFG owns both PT Bank Danamon Indonesia, Tbk. (Danamon), which is one of the largest banks and the leading used automotive financing company in Indonesia, and The Bank of Ayudhya Public Company Limited (Krungsri), Thailand’s fifth-largest bank in terms of loans and deposits.
Through this collaboration, MUFG and its subsidiaries will have the ability to provide business-to-business (B2B) and business-to-consumer (B2C) financing on Carsome’s platform by leveraging Carsome’s transactional data, further expanding Carsome’s positioning as the leading used car ecosystem in the region.