Singapore-based classifieds unicorn Carousell trimmed its losses by 40% in the financial year ended December 31, 2023, as it reined in costs, according to regulatory filings.
The company reported a net loss of $38.1 million last year, down from $63.1 million in the previous year, show its filings with Singapore’s Accounting and Corporate Regulatory Authority (ACRA).
Carousell’s revenue jumped 40% to $115.9 million in 2023, largely due to growth in its recommerce business, which allows users to trade their used goods on the platform. Recommerce was the top contributor to the firm’s top line last year, accounting for 46% of revenue after more than doubling its proceeds to $52.7 million.
Carousell’s key financial metrics (all figures in USD million)
“We are deeply encouraged by this set of results, which proves we are on the right trajectory in solving key user problems in opting for secondhand and strengthening our leadership stake in the high-growth resale market in the region. We will continue to focus on building up our current recommerce businesses, invest in organic growth by building great products and synergistic acquisition,” said Carousell chief financial officer JJ Ang.
Classifieds advertising was the second biggest revenue generator, contributing $47.75 million last year, up from $43.6 million in 2022, according to the ACRA filing.
The firm’s top expense during the year was employee benefits, $64.7 million, which remained stable compared to the previous year, although Carousell had slashed about 10% of its headcount in December 2022. Salaries, commissions, and bonuses were the biggest contributors to employee benefit expenses, at $46.2 million.
Carousell saw a notable increase in expenses, such as changes in inventories of finished goods, which rose 114% to reach $49 million, and office-related expenses, which surged 41% to $2.4 million. On the other hand, its marketing expenses narrowed by 46% to $6.4 million compared to the previous year, and professional fees were down by 31% to $4.4 million in 2023.
In 2023, the company spent $19.36 million on operating activities, $65.1 million on investments, and another $3.2 million on financing.
At the end of 2023, Carousell had cash and cash equivalents of $31.5 million, down significantly from $118.9 million.
Cash flows (all figures in USD million)
Carousell has more than 25 direct and indirect subsidiaries in Singapore, Taiwan, Hong Kong, Malaysia, India, Philippines, Vietnam, and Indonesia. The company’s investments in its subsidiaries reached $145.3 million during the year.
Carousell was founded in 2012 by Siu Rui Quek, Marcus Tan, and Lucas Ngoo as a marketplace for pre-loved goods. Initially, the bulk of its transactions were from Singapore, but the company branched out to Malaysia and Taiwan at the end of 2014. In 2017, the company forayed into property and automotive listings.
Earlier in February this year, Carousell’s co-founder Lucas Ngoo stepped down from his day-to-day management role. However, he will continue to participate as a co-founder, board director, and advisor when needed.
Carousell has acquired startups across emerging categories such as streetwear (OxStreet), used phones (Laku6) and secondhand clothing (Refash).
In April 2024, Carousell announced its acquisition of LuxLexicon, a luxury bag reseller and authenticated luxury consignment platform. The acquisition comes as Carousell seeks to further grow its luxury category, one of its largest categories, to take on a larger market share of the burgeoning luxury resale market in Southeast Asia, Hong Kong, and Taiwan.
Filings showed that on April 1, 2024, the subsidiary Luxury Lexicon Pte. Ltd. acquired LuxLexicon Pte. Ltd. to accelerate growth in the luxury category. The purchase is payable in cash and company shares, with potential earnout and bonus payments in cash if performance targets are met.
DealStreetAsia previously reported that Carousell had issued shares worth $1.5 million to luxury bag reseller LuxLexicon’s founder, Florence Low.
During the fiscal year ended December 31, 2023, the company issued ordinary shares to acquire a 14.40% equity interest in Rebonics Pte. Ltd. from a non-controlling interest, which was then transferred to its subsidiary, Lyra SPV Pte. Ltd., in exchange for new ordinary shares of Lyra valued at $2.3 million.
In 2023, the company reviewed the recoverable amount of its investment in a subsidiary, repurposed as a business process outsourcing centre for the group. An impairment loss of $19.3 million was recognized in ‘other operating expenses,’ reflecting the write-down of this investment to its recoverable amount. The recoverable amount was based on its value in use with a discount rate of 10%.