Carsome cements tech unicorn status with US$200m iCar Asia acquisition

Carsome Group has acquired 19.9% of iCar Asia from Catcha Group. Carsome and Catcha Group have also made a joint proposal to iCar Asia's independent directors to acquire the balance of 80.1% of iCar from its shareholders. The total transaction is estimated to be worth more than US$200 million and according to Carsome, makes it Malaysia's first tech unicorn. It also reportedly cements Carsome's position as Southeast Asia's most valuable digital automotive marketplace.

Catcha Group will become a shareholder of the Carsome Group in exchange for the sale of its shares in iCar Asia to Carsome. Eric Cheng will continue to lead the Carsome Group as CEO. When asked about changes on the marketing teams, Carsome's spokesperson said it is unable to comment in detail on ongoing developments as regulatory and board approval is still required for the transaction between a private and public company. "But, what we can share is that Carsome is growing rapidly, and we will continue to grow our support functions as the business grows," the spokesperson added.

The proposed acquisition of iCar Asia offers an enhanced suite of digital products and services to more dealers and consumers in all key markets. The Group is targeting a revenue of US$1 billion this year and around 100,000 cars transacted annually.

According to Carsome, the expanded suite of solutions will offer an end-to-end, super-app experience that covers the entire car buying and selling value chain. This offers consumers a seamless, one-stop solution as Carsome expands its offerings from search, transaction, finance and insurance to after-sales services. With the integration, the group will also have more than 10 million monthly unique visitors, over 13,000 car dealers on its network as well as 460,000 live partner listings. New products and services will also be announced by the company.

"The market opportunity is vast, and we are focused on growth – which will come about through providing consumers in the region with the absolute best experience regarding their automotive needs. Our expanded suite of solutions will offer an end-to-end, super-app experience that covers the entire car buying and selling value chain," the spokesperson told A+M.

Cheng said the team is excited to have Grove on board as he brings along two decades of tech entrepreneurship and capital market expertise. "This transaction is an important part of our growth strategy to build the entire automotive ecosystem in Southeast Asia and part of how we are transforming the industry through trust, transparency and technology," Cheng said.

He added that this is the first step towards consolidation to form the largest digital automotive group in terms of revenue, user base, largest live listing, and the best end-to-end fulfilment capability in the region.

Meanwhile, Grove said: "Bringing iCar Asia’s extensive traffic and dealer network in the region together with Carsome’s leadership position in automotive e-commerce is extremely powerful." The combined group also looks forward to dominating the US$55 billion digital automotive space in Southeast Asia in the years ahead, Grove said.

Earlier this month, Carsome acquired an equity stake in Indonesia's Universal Collection (UC), an offline car and motorcycle auction service based in Jakarta. This represents Carsome's first investment in Southeast Asia this year. According to Carsome, UC transacted close to 30,000 vehicles last year. It also has branches in South Tangerang, Bandung, Yogyakarta, and Malang. The acquisition allows Carsome to expand its network coverage and access to financial and leasing providers. According to the company, it also makes it the largest omnichannel integrated car eCommerce platform in the region.

The company has been growing from strength to strength, bagging a US$30 million series D funding last December to strengthen its existing regional position in consumer-to-business used car eCommerce, and accelerate its new offering in the B2C segment, the Carsome Experience Centre.

It also launched a data centre of excellence in May this year in a bid to revolutionise the used car industry through digitalisation and to empower decision-making in business. As part of the move, it appointed Piyush Palkar as chief data officer. Meanwhile, former Carsome CMO Danny Chin was promoted to chief expansion officer in March this year. At the same time, the company also brought on board Derek Tan as chief brand officer that month.

The company is in stiff competition with rival Carro to gain dominance in Southeast Asia. Just last month, Carro bagged US$360 million in series C funding led by SoftBank Vision Fund 2. Shortly after, media reports claimed that Carsome is allegedly in talks to raise more than US$200 million in a pre-IPO round. Carsome also indirectly called out Carro on LinkedIn last month for allowing one of its employees to stand outside an inspection centre in Jakarta while holding an advertising poster.

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