Singapore-based used car marketplace Carro announced that it has clocked its first profitable year so far, achieving more than S$650 million ($464 million) in revenue and doubling its gross profit in the year ending March 2022.
“FY2022 was our strongest showing yet. Not only did we grow 2.5 times, we did so profitably,” said the startup’s co-founder and CEO Aaron Tan.
According to the announcement, the group’s continued focus on online retailing and machine learning has produced record gross profits. The company is on track to improve its gross profit margins to about 10% by the end of this financial year, thereby tripling its absolute gross profit, it said in a statement
The company’s retailing of pre-owned vehicles and its financial services arm drove the bulk of its profitability and margins. Excluding its wholesale business, the company expects gross profit margins to be almost 15%.
It is also currently tracking at over S$1.3 billion in run-rate revenue and is poised to deliver another 2x growth in revenue this financial year (FY2023). DealStreetAsia has reached out to Carro for details of its profits.
Carro, founded in 2016, closed its financial year ended March 2021 with over 2.5x growth in revenue and was EBITDA positive for the second year running. According to a regulatory filing of Trusty Cars Pte Ltd, Carro’s legal entity, the firm had posted revenue of S$117.8 million, and a S$5.2 million net loss for FY2020.
For FY2022, the company said it secured close to S$200 million in additional financing lines, had an outstanding loan book of more than S$400 million, and less than 0.1% in non-performing loans.
“We were laser-focused over the pandemic around operational excellence and cost improvements; we chose to utilise programmers to solve our problems and are starting to see the fruits of our labour,” Tan added.
The company is expanding into Taiwan and Japan this year.
Founded by college friends Aaron Tan, Aditya Lesman, and Kelvin Chng, Carro operates across the entire chain of car ownership. It has pioneered innovative services such as Singapore’s first contactless car purchase service, first car subscription service, and the first region-wide behaviour and usage-based car insurance.
In November last year, Carro had secured $100 million in fresh funding from investors including Singapore state investor Temasek Holdings, Malaysian state-backed fund manager Permodalan Nasional Berhad (PNB), and Indonesia’s Emtek Group.
The company bagged $360 million in Series C funding in June 2021 from Softbank’s Vision Fund 2, EV Growth, and others, and joined the Southeast Asian unicorn club.
Carro has a presence in Singapore, Malaysia, Indonesia, Thailand, Taiwan and is planning to drive into Japan.
Competition has heated up in Southeast Asia’s used car marketplace with India’s CARS24 launching its ASEAN foothold in Thailand in November and plans to follow up by entering Indonesia in 2022, setting the stage for a three-way battle with Singapore’s Carro and Malaysia’s Carsome.