CARSOME, a Malaysia-based used car platform, has raised US$30 million in a Series D equity round for further expansion in South-east Asia.
The company is also planning an initial public offering by end-2023, group chief financial officer Juliet Zhu told The Business Times, adding that the US market looks "most suitable" for the company right now, due to the interest in this sector from capital markets there.
Ms Zhu added that the Series D round can lead to "merger and acquisition opportunities", to acquire ancillary capabilities and consolidate its supply chain.
"We have built a defensible, scalable and profitable business with very healthy unit economics attributed to both growth in gross margin and steady improvements in productivity and conversion metrics," said Ms Zhu.
The round was led by growth equity firm Asia Partners, and joined by existing investors Burda Principal Investments and Ondine Capital, said Carsome in a statement on Tuesday.
The new funding comes amid an increase in demand for used cars across its markets in South-east Asia - Singapore, Malaysia, Indonesia and Thailand, said co-founder and group chief executive Eric Cheng.
"Over the past six months, we have doubled our monthly revenue compared to pre-pandemic levels, a dramatic acceleration due to the impact of the ongoing Covid-19 pandemic on consumer behaviour across our region," said Mr Cheng. Carsome said it recorded its highest revenue quarter in its history during the Q3 this year, doubling its revenue from the pre-pandemic period.
The company also said it has turned an "operational profit" as at October. This excludes headquarter costs, such as "C-suite management cost, certain professional fees for legal and audit, as well as costs for headquarter office rental and utilities", clarified Ms Zhu.
Fresh funds will also be used to build up the company's used car platform, as well as accelerate its new offering in the business-to-consumer segment, where it sells its own inventory of used cars to consumers. Through this, consumers on its platform can buy or sell used cars from Carsome. It also provides services such as car inspections, ownership transfer and financing for its users and car dealers.
Carsome currently transacts an annualised 70,000 cars totalling US$600 million in transacted value, and has more than 1,000 employees across all its offices, it said.
Oliver Rippel of Asia Partners said: "Carsome's integrated approach offering a one-stop solution to used car buyers and sellers is genuinely impressive. We see that this will be the way forward for the used car industry, and we look forward to working closely with Eric and his very capable team in further scaling the business across the region."
The company late last year raised a US$50 million Series C round from investors such as MUFG Innovation Partners, the corporate venture capital arm of Japan's Mitsubishi UFJ Financial Group and Daiwa PI Partners. The startup then claimed to have turned an operating profit in Malaysia too.