car sales
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Used car marketplace Carsome gets $30 million Series D for its Southeast Asia growth plans
Carsome, which bills itself as Southeast Asia’s largest e-commerce platform for used cars, announced it has closed a $30 million Series D. The funding was led by Asia Partners, with participation from returning investors Burda Principal Investments and Ondine Capital.
The startup described this as one of the largest “all-equity financings to date in Southeast Asia’s online automotive industry.” Part of the Series D may be used for mergers and acquisitions to consolidate the company’s supply chain.
Founded five years ago in Malaysia, Carsome’s platform serves both C2C and B2C segments, and ensures quality by conducting inspections before vehicles are listed on its platform. It now has 1,000 employees and claims to transact 70,000 cars on an annualized basis, totaling $600 million.
In a press statement, co-founder and group chief executive officer Eric Cheng said that the company, which now also operates in Indonesia, Thailand and Singapore, doubled its monthly revenue over the past six months, compared to pre-pandemic levels. The company says that this is partly because more people and businesses are buying their own cars for safety reasons.
While sales of new vehicles have plummeted around the world, used car sales, especially through e-commerce platforms, are recovering more quickly, according to Counterpoint Research. This largely because people want to avoid public transportation and ride-hailing, but also want cheaper options.
Other used car platforms in Southeast Asia include Carro, OLX Autos (formerly called BeliMobilGue) and Carmudi.
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Angling to be the Carfax for EV batteries, Recurrent raises $3.5 million
The Seattle-based startup Recurrent said today it has closed on $3.5 million in financing as it looks to become the Carfax for electric vehicle batteries.
The battery system is arguably the most important part of any electric vehicle and as the market for used electric vehicles expands, independent verification on battery life and range can help car buyers with their purchasing decision, the company said.
Investors include Wireframe Ventures, PSL Ventures, Vulcan Capital, Prelude Ventures, Powerhouse Ventures, Ascend.VC and the American Automobile Association’s (AAA) Washington chapter.
“Used car sales are at least double new car sales every year. With the third anniversary of Tesla’s Model 3 and the rapid introduction of new electric models across all vehicle makers, used EV sales are about to grow substantially,” Paul Straub, managing director of Wireframe Ventures, said in a statement. “The timing is right for a first mover with a strong data and technology advantage to bring confidence and transparency to these transactions.”
The company said it will use the money to invest in continued product development as it refines its third-party condition reports for used electric vehicle shoppers and battery analytics stats for current electric vehicle owners.
Recurrent collects its data from 2,500 volunteer electric vehicle drivers who currently use the Recurrent service for monthly battery reports on their own vehicles
“While there’s clearly a market-driven opportunity here, we’re particularly excited about the potential impact of the Biden administration’s policies on EV adoption,” Emily Kirsch, founder and managing partner of Powerhouse Ventures, said in a statement. “We’ve seen the huge impact that favorable policies are having in the EU and think there’s a lot of upside potential in a similar acceleration in the U.S.”
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The future of car ownership: Cars-as-a-service
Car shoppers now have several new options to avoid long-term debt and commitments. Automakers and startups alike are increasingly offering services that give buyers new opportunities and greater flexibility around owning and using vehicles.
Cars-as-a-Service
In the first part of this feature, we explored the different startups attempting to change car buying. But not everyone wants to buy a car. After all, a vehicle traditionally loses its value at a dramatic rate.
Some startups are attempting to reinvent car ownership rather than car buying.
Don’t buy, lease
My favorite car blog Jalopnik said it best: “Cars Sales Could Be Heading Straight Into the Toilet.” Citing a Bloomberg report, the site explains automakers may have had the worst first half for new-vehicle retail sales since 2013. Car sales are tanking, but people still need cars.
Companies like Fair are offering new types of leases combining a traditional auto financing option with modern conveniences. Even car makers are looking at different ways to move vehicles from dealer lots.
Fair was founded in 2016 by an all-star team made up of automotive, retail and banking executives including Scott Painter, former founder and CEO of TrueCar.
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SoftBank’s Vision Fund invests $1.5B in Chinese second-hand car startup Chehaoduo
SoftBank’s Vision Fund is taking a bet on China’s auto market after it agreed to pour $1.5 billion into online car trading group Chehaoduo, which literally means “many cars” in Chinese.
The Beijing-based company operates two main sites — peer-to-peer online marketplace Guazi for used vehicles, and Maodou, which retails new sedans through direct sales and financial leasing. (These sub-brands are more subtly named; they translate to “sunflower seeds” and “edamame,” respectively.)
Chehaoduo said it will deploy the proceeds on technology investments as well as the development of new products and services. It also plans to ramp up its marketing efforts and continue to open brick-and-mortar stores, an omnichannel move it believes can enhance trust in consumers used to meeting dealers in person and differentiate it from peers with an exclusively online focus. Chehaoduo currently runs 600 offline stores nationwide supporting new and used car dealing along with after-sales services.
The sizable funding round arrived at a time when China’s softening economy is sapping consumer confidence, but the company’s two-pronged strategy makes sure it covers a broad range of consumer demands. New passenger car sales in China — the world’s largest auto market — fell for the first time since the 1990s to 23.7 million units last year, according to a report by China’s Association of Automobile Manufacturers, the country’s top auto association.
On the other hand, used cars became a more economical choice in a consumer culture that, unlike many countries in the west, has been slow to embrace second-hand goods. But that mindset is shifting as people feel the heat of the Chinese economic downturn: Secondhand car sales were up 13 percent during the first 11 months of 2018, data from China’s Automobile Dealers Association show.
“China’s used car market is growing rapidly but online penetration remains low and auto financing is underutilized compared to developed markets. In just three years, Chehaoduo Group, through the Guazi brand, has leveraged the latest innovations in data-driven technology to establish China’s leading car trading platform,” says Eric Chen, partner at SoftBank’s Investment Advisers, in a statement.
The Japanese investment group has been a prolific backer in the mobility industry through a variety of affiliated companies with Vision Fund being one. SoftBank’s massive portfolio includes the likes of Uber, Didi Chuxing and Grab .
Chehaoduo counts Uxin and Renrenche as its most serious rivals. Uxin raised $225 million from a U.S. initial public offering last June while Renrenche lured Goldman Sachs in a $300 million funding round last year that also saw participation from Didi and Tencent.
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