OUTLOOK FOR THE E-CONOMY 2017
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Singapore-based auto classifieds Carro has a double whammy of news today — it has moved into the vehicle financing space and raised $12 million more from investors.
Carro was founded in late 2015 and it went on to close $5.3 million in seed financing last summer. CEO Aaron Tan, a former investor with Singtel himself, said the lead investor’s identity is not being disclosed for this new round, but other participants include existing investors Venturra Capital, Singtel Innov8, Golden Gate Ventures, Alpha JWC Ventures, Skystar Capital and GMO.
The startup began life as a mobile-focused classifieds site in Singapore. Since we wrote about it last June, Carro has expanded into Thailand and Indonesia while it has also branched out to offer financing options for customers — both consumers and dealerships. That move, which is supported by underwriting relationships with banks, happened four months ago and was planned when we spoke to Tan last year.
Genie Finance, Carro’s underwriting business, is helmed by insurance industry veteran Helen Neo who claims 30 years in the industry. Tan said that beyond assessing a customer’s information, such as salary, Carro believes it can make a difference by understanding the car market better than traditional insurers.
“If we can understand vehicles over time, we can underwrite the risk much better,” he explained in an interview.
Tan said Carro, which reached $120 million in GMV last year, makes around 70 percent of its revenue from “financing-related income.” He added, however, that the company does pass on riskier deals for the moment — those are routed through to banks for financing options.
Beyond being a lucrative segment for business, the Carro CEO believes the company can offer a genuinely different option for consumers.
“We’re a ground-up tech company which makes us very different from traditional auto finance companies,” he added. “We will build our own financial systems, credit systems, and customer service systems from scratch.”
To illustrate that approach, Carro has launched its own auto finance app — Genie — that exists separate to Carro’s core mobile app. While Genie (the app) is focused primarily on vehicle financing, a service that people only need when they are buying a car, Tan said the vision is to develop it into a useful service for more frequent engagement. Beyond providing details on a customer’s repayment plan, that could mean prompts for repairs, workshop appointments and other services related to their car.
The Carro team weighed up developing a bot for widely used platforms like Facebook Messenger, but settled for their own app because third-party platforms “limit the ability to create new products and services for how people might interact.” Still, the option to fall back and develop a Facebook bot is there in the future.
At this point, Genie Finance is limited to Singapore but Tan said it is likely to roll out to Indonesia and Thailand over the coming months. The company has also introduced instant sales — where it buys a vehicle and then sells it via auction — and is looking at other services, including warranties, workshop appointments and more in the future. We shouldn’t, however, expect new country launches in Southeast Asia.
“We will triple down on the three markets we’re in,” Tan said. “There are no immediate plans to enter new markets because we think we’re still very early into the growth of these countries.”