Malaysia-based used car marketplace, Carsome, has plans to expand into more markets throughout Southeast Asia after raising US$6 million in a new round led by Gobi Partners. Other investors include Lumia Capital, Innoven, and existing investors 500 Startups and Spiral Ventures.
The company will use the funds to expand into new markets and set up more inspection outlets across the four countries where it already has a presence: Malaysia, Singapore, Thailand, and Indonesia. With the exception of Singapore, the countries are the largest car markets in the region, with a total of 3.5 million used car transactions annually, claims Carsome. Across Southeast Asia, the transactions number 4.5 million, with the used car industry raking in US$30 billion in sales per year, chief executive officer Eric Cheng told Tech in Asia.
Carsome’s choice of investors for this round stems from a decision to work with people who carry extensive knowledge of the industry. Both Gobi Partners and Lumia Capital back used car trading platforms – Chezhibao in China, which recently just raised US$100 million, and Instacarro in Brazil, respectively.
“The C2B model that Carsome emphasizes on makes a lot of sense especially in emerging markets like Southeast Asia because there is not enough data that enables trust between sellers and buyers. Carsome provides a de-risking element for both sides – the sellers who are generally individuals and buyers who are dealers,” says Victor Chua, Gobi Partners vice president of investment for ASEAN.