Carro, a Singapore-based online marketplace for buying and selling cars, has landed $5.3 million to expand its service across Southeast Asia.
This Series A round was led by Indonesia’s Venturra Capital, from its $150 million fund, with participation from Singtel Innov8, Golden Gate Ventures, Alpha JWC Ventures, Skystar Capital and GMO Venture Partners among others. All in all, Carro — which only launched in November 2015 — said it has welcomed ten different investors from across Indonesia, Singapore, Japan and China.
That mix of partners is designed to enable the service to expand into more markets in Southeast Asia this year. Aaron Tan, Carro’s CEO and a former investor with Singtel Innov8, explained that the company is already proactively making inroads into Indonesia, Thailand and Malaysia with a view to being present in all three by the end of 2016. Carro plans to hire local staff to run each country business much like a founder, rather than shipping expats in, he explained.
There are plenty of classifieds that help car owners sell their vehicles online, but Carro aims to stand out from the crowd with a services-focused offering. That’s to say that it doesn’t simply focus on sales, it has a useful service for calculating the price and likely time to sell a vehicle — a nice hook to nab potential sellers — a virtual showroom option for dealers, a consumer-to-consumer marketplace and, as of today, ‘Carro Workshop,’ an app that helps car owners find workshops for services — mandatory and otherwise — as required.
The company also works with the leasing, insurance and warranty industries to offer preferred rates to customers. Aside from the commission fees it takes when it sells a partner’s package, it draws money from each transaction that it enables. Unlike others, it doesn’t charge a standing subscription fee to dealers or others in the auto industry.
This suite of services is operation in Singapore but for new market expansions Carro may tailor its offerings according at launch, Tan explained.
Looking forward to next year, the Carro CEO admits that the company will have to decide whether to continue its focus on Southeast Asia, a nascent but high-potential digital market with over 600 million consumers, or battle for marketshare in more established Western markets.
“If we win those [new expansion] markets do we double down on Southeast Asia, going into Vietnam, Myanmar and other major markets in the region, or look to Japan, the UK and other big countries?” he said.
For now there is no answer, and that further expansion would require a Series B round for financing. Though there is plenty of competition for consumer attention, Tan and the 20-plus team at Carro say they aren’t losing sleep over car sales sites in Southeast Asia like iCar Asia, which has been on an acquisition spree, or Rocket Internet-backed Carmudi.
“Classified sites are more like channels,” he said. “We use them to promote [our own sales.] When you look at classifieds versus marketplaces, [there’s] not that much in terms of competition.”
Carro said gross revenue on its platform, which it claims is increasing at a 30 percent rate month-on-month, is “on track” to reach $100 million this year.
As you might expect for a startup in Southeast Asia, Tan said that some three-quarters of Carro’s traffic comes from mobile. However, with tens of thousands of dollars in purchases at stake, mobile tends to be for browsing with most consumers preferring to buy on a tablet or laptop after doing more research before parting with their hard-earned cash.