There was a time when only a few startups achieved the coveted unicorn status every year, and stories like these were limited to about once a month. However, 2021 has changed that, and the unicorn family has grown by leaps and bounds this year, with over a dozen firms becoming unicorns in the first half of the year and coming from India itself. Well, the rest of the world is planning to catch up, with Singapore enlisting a new member in its own unicorn startups club today.
Singapore-headquartered Carro, one of the leading online marketplaces for used cars in South-east Asia, has raised $360 million Series C funding round led by Softbank Vision Fund II, making it the latest firm in the region to enter the coveted unicorn family.
“The valuation for the company is well over a billion dollars,” Aaron Tan, founder and CEO, Carro, told Reuters.
The funding round also included EV Growth, a prominent Indonesia-based fund, and the growth-stage arm of East Ventures.
The company plans to use the proceeds from the funds to expand into new markets and expand its business across Thailand, Indonesia, Malaysia, and Singapore (with Indonesia being the main focus for the next few years), where the start-up clocked significant growth over the past year. It also plans to ramp up its financial services by expanding beyond in-house loan financing, and accelerate the development of its artificial intelligence capabilities.
The six-year-old Carro, which has raised more than $400 million in equity to date and over $200 million in debt, allows consumers and wholesale businesses to buy and sell vehicles, providing services for all aspects of car ownership – from buying and selling to financing solutions and after-sales services.
The start-up simplifies the process of buying and selling of cars for both consumers and dealers by leveraging artificial intelligence.
While its business fell initially during the pandemic, it has adopted to the latest trend and is now benefitting from the shift of consumers to online transactions. In fact, Carro said that people were more willing to but vehicles entirely online without the need to visit a showroom.
You may wonder how Carro, which had a 2016-2019 compound annual growth rate of 422%, uses AI technology. AI scans images of cars to detect any potential problems, while mechanics check for defects. Carro said that this team up between AI and humans have accelerated the transaction process by 20% and reduced human error by up to 80%.
Carro announced that it ended the financial year ending March 2021 with over 2.5 times growth in its annual revenue. It clocked revenues of $300 million for the year ending March 2021 and registered positive EBITDA (earnings before interest, taxes, depreciation, and amortization) for two years.
With such strong performance, the start-up is looking to go public with an initial public offering (IPO) in the US within the next two years.
“An IPO remains on the horizon for us,” Tan said. “18 to 24 months is achievable.” He added that the firm is on track to handle more than 200,000 used-vehicle transactions this year.
