Carro raises US$110M funding as contactless car buying boosts its revenues
Carro, a Singapore-headquartered wholesale automotive marketplace, announced today it has secured SGD150 million (US$110 million) in debt financing and additional equity.
Investors joined this round include Mitsubishi Corporation and MS&AD Ventures, the venture arm of MS&AD Insurance Group Holdings.
The development comes as Carro marks its fifth anniversary with a 500 per cent year-on-year revenue growth in September as COVID-19 drives consumers towards digitalised car purchase services.
Additionally, Carro said it is on track to reach S$1 billion (US$740 million) revenue in two years.
“Our strategic partners will help turbo-charge our growth. The funds raised showcase the trust from our financial backers as we remained EBITDA positive throughout the COVID-19 pandemic. In fact, we have recently hit record high monthly revenues and EBITDA,” claimed Carro’s CFO Ernest Chew.
Founded in 2015, Carro is a subscription-based car service, which enables consumers to select a plan and drive off with a car of their choice without the hassle of traditional car ownership.
Carro rolled out this service to cater to today’s generation of drivers, who wish to enjoy the convenience of owning a car without needing to worry about annual depreciation and unexpected expenses such as repairs, roadside assistance and insurance premiums.
The subscription service is currently available in four plans: Daily, Roomy, Fancy and Luxury. With the service, subscribers can pay a flat monthly fee that includes all costs associated with car ownership — such as insurance, road tax, warranty, 24-hour assistance, and maintenance costs. At the end of the term, customers can return the car.
As of September 2020, Carro has raised over S$100 million (US$74 million) in equity from SoftBank Ventures Asia, EDBI, Insignia Ventures Partners and B Capital Group. This included a US$30 million raised in August last year and a US$60 million raise in May 2018.
“Carro’s growth journey has been about using technology to bring a highly differentiated car buying experience that is seamless and transparent. COVID-19 has pushed the envelope for innovation in the auto market; the current economic slowdown means customers are looking for value-for-money cars but are also concerned about their safety. We expect more customers in the region will seek digital purchasing solutions. Hence, we will continue to leverage technology to make car ownership safer, efficient and delightful.,” said Chew added.