Carro, a prominent player in the Southeast Asian used-car marketplace, is gearing up to raise its valuation beyond $1.5 billion, as per a recent report by Bloomberg.
In anticipation of its stock market debut, the startup is seeking approximately $100 million in funding, a move it believes will solidify its position as a leading force in the region. CEO Aaron Tan has disclosed that Carro is currently engaged in discussions with potential investors for a pre-initial public offering funding round, with prospects of elevating its valuation to surpass $1.5 billion.
Tan asserts that Carro’s commitment to innovation will distinguish it within the market. He highlights a novel tool referred to as the “Shazam of engines,” designed to assess the condition of pre-owned vehicles by analyzing the sound of their motors. Additionally, Carro is implementing a five-day return policy and has ambitious plans to expand its operations to Japan and Hong Kong within the year.
Amidst its capital-raising endeavors, Carro navigates a challenging landscape characterized by job cuts, CEO resignations, and declining startup valuations within the regional technological sector. Nevertheless, over the past nine years, Carro has allocated significant resources to procure inventory, develop delivery networks, establish refurbishment centers, and establish its presence in the used-car market. The company has also introduced consumer-friendly features such as no-quibble returns and expedited delivery to enhance the online purchasing experience.
To sustain its operations, which involve the movement of a substantial volume of vehicles monthly, Carro must manage over a hundred trailers daily, orchestrate efficient routes, and oversee a financial portfolio exceeding $100 million at any given time.
CEO Aaron Tan emphasizes the necessity of substantial investments, expansive infrastructure, ample manpower, and robust technological systems to operate at Carro’s scale. “It’s easy to do this at a mom-and-pop shop level. But if you want to do this at scale, you need investments, you need a lot of space, you need the manpower and of course the tech and systems,” Tan remarked.
Yinglan Tan, founding managing partner at Insignia Ventures Partners and an early investor in Carro, expresses optimism regarding the company’s expansion into Japan and Hong Kong. Tan believes that Carro’s success in additional Asian Pacific markets, such as Japan and Hong Kong, will appeal to institutional investors in the United States. However, Tan cautions that while technology can provide an initial advantage, discipline is essential to ensure sustained success in the competitive landscape.
