ASX-listed automotive marketplace iCar Asia is acquiring the operations of rival Carmudi Indonesia for $3 million, according to an announcement.
The deal, which is expected to be completed on 15 Oct 2019, will be paid from cash reserves in two parts – a payment of $2 million will be doled out on completion and another $1 million will be paid on 15 Oct 2020.
Carmudi is a car classifieds startup, backed by Rocket Internet. The company, which has operations in Indonesia and the Philippines, last raised a funding round of $10 million in January 2018, led by Tengelman Ventures, HV Holtzbrinck Ventures and Asia Pacific Internet Group (APACIG).
In Indonesia, Carmudi claims approximately 2 million visits per month. The company also operates five physical car sales centres, called Carsentros, which act as transaction platform for car dealers and leading car financing businesses, and generate finance commission income.
The deal is expected to strengthen iCar’s foothold in Indonesia, amidst stiff competition in the used car space, all looking to tap into the enticing opportunity in the market, which averages 3.5 million used cars per year.
Among iCar’s peers vying for market share in Indonesia is BeliMobilGue, a joint venture between founder Rolf Monteiro, Berlin-based Frontier Car Group, and Indonesia-only independent venture capital firm Intudo Ventures. The startup last month raised a $30-million investment from parent company Frontier Car Group, just six months after it secured a $10-million Series A round.
Another strong competitor is Singapore’s Carro, which recently closed a $90 million Series B round from a number of investors including SoftBank Ventures Asia. The company is currently undergoing an aggressive expansion strategy, having acquired Indonesian C2C marketplace Jualo, and invested $30 million in Malaysian car-bidding platform myTukar.
iCar said the deal with Carmudi Indonesia expected to more than double iCar Asia Indonesian revenue and increase growth rates with synergies expected to result in the combined businesses breaking even in 2020.
The group says is still on track for EBITDA breakeven by the end of 2019. Last month, it announced 1H 2019 results with A$6.01 million in revenue (first half of 2018: A$5.01 million), recording a year-on-year growth of 20% with all three countries of operations registering positive growth in the period.
“We are delighted to have Carmudi Indonesia join iCar Asia and further strengthen our position in the Indonesian market in both the new and used car segments. This acquisition furthers our vision of being the platform that people turn to in order to solve all their automotive needs,” says Hamish Stone, iCar Asia’s chief executive officer.
Carmudi Indonesia is not the first regional acquisition by iCar. The company, which is backed by Malaysia’s Catcha Group, in 2014 made a similar inorganic expansion move by acquiring Thailand’s leading vehicle classified site, One2Car, for $14.4 million.