Carro, a used-car marketplace in Southeast Asia, is looking to raise its valuation to over $1.5 billion, according to a Bloomberg report.
As the startup is preparing for its debut in the stock market, it is looking to around $100 million as it believed that the funds would help it become one of the top players in the region. According to CEO Aaron Tan, Carro is currently talking with investors for a pre-initial public offering funding round. This would potentially raise its valuation to more than $1.5 billion.
Tan said that innovations will allow Carro to stand out from the rest of the market. He described one such tool, which he called the “Shazam of engines” as it analysed the health of second-hand cars using the sound of its motors. It is also offering a five-day return policy and is also intending to expand to Japan and Hong Kong within the year.
While Carro is trying to raise its capital, it is notably a difficult time for firms to do so as the technological industry in the region has been seeing job cuts, CEO resignations, and falling startup valuations.
Carro has been investing a lot of money over the last nine years in order to acquire inventory, build delivery networks, set up refurbishment centers, and fit its used-car showrooms. The company has also introduced features such as no-quibble returns and speedy delivery in order to make its consumers more comfortable with buying online.
In order to move a multitude of cars monthly, Carro would need to oversee more than a hundred trailers everyday, plan routes, and manage more than $100 million at any time.
“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 said.
Yinglan Tan, founding managing partner at Insignia Ventures Partners, one of Carro’s early investors, said that Carro’s expansion into Japan and Hong Kong has a big potential.
“It is important that Carro wins a few more markets in Asia Pacific, as the institutional investors in USA will find these APAC markets such as Japan and Hong Kong more sexy. Technology without discipline can lead to an early head start but also an early crash,” Yinglan Tan said.
