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DealStreetAsia

Malaysian trading startup Carsome to acquire iCar Asia in $200m deal

Deal creates the largest digital automotive marketplace in Southeast Asia

Traffic in Kuala Lumpur. iCar Asia operates an automotive listing and content platform across Malaysia, Thailand, Indonesia and Singapore, the same markets where Carsome provides end-to-end solutions for car buyers and dealers, from vehicle inspection to ownership transfer and car financing.   © Reuters

CEBU, Philippines -- Southeast Asian used car trading platform Carsome will acquire a 19.9% stake in ASX-listed iCar Asia from Catcha Group, according to a company statement.

Carsome and Catcha have also made a joint proposal to acquire the remaining 80.1% of iCar Asia from its shareholders in a transaction with a total value of more than $200 million.

The deal will create the largest digital automotive marketplace in the region, the statement added.

According to the announcement, Catcha Group will become a shareholder of the Carsome Group in exchange for the sale of its shares in iCar Asia to Carsome.

DealStreetAsia reported in September that iCar Asia had been seeking buyers for the company.

Catcha Group held a 10.9% stake in iCar Asia as of the end of 2019, according to iCar's annual financial report. Its largest shareholder is ICQ Holdings, a Malaysian entity with former links to Rev Asia, another Catcha Group-backed entity.

"This transaction is an important part of our growth strategy to build the entire automotive ecosystem in Southeast Asia, and part of how we are transforming the industry through trust, transparency and technology," said Eric Cheng, co-founder and group CEO of Carsome.

Founded in 2015 by Cheng and Teoh Jiun Ee, Carsome provides end-to-end solutions for car buyers and dealers, from vehicle inspection to ownership transfer and car financing.

It currently transacts an annual 100,000 cars, totaling more than $800 million, and has more than 1,700 employees.

iCar Asia operates an automotive listing and content platform across Malaysia, Thailand, Indonesia and Singapore, the same markets where Carsome operates in.

The proposed integration of Carsome and iCar Asia, according to the announcement, will create a digital marketplace with a target revenue of $1 billion for 2021, around 100,000 cars transacted annually, over 460,000 live partner listings, over 10 million monthly unique visitors and over 13,000 car dealers on the network.

Patrick Gove, co-founder and group CEO of Catcha Group, will join Carsome Group.

The deal comes less than a week after Carsome announced that it has acquired a stake in PT Universal Collection, a Jakarta-based offline car and motorcycle auction service company. It marked Carsome's first investment in Southeast Asia this year and allows the integrated car e-commerce platform to double its automotive transaction volume in Indonesia.

DealStreetAsia reported in June that Carsome was in talks with investors to raise over $200 million in a pre-IPO round that will value the company at over $1 billion, making it the first Malaysia-born unicorn since ride-hailing giant Grab.

Carsome's existing investors include Asia Partners, Burda Principal Investments, Japan's MUFG Innovation Partners, Daiwa PI Partners, Endeavor Catalyst, Ondine Capital, Gobi Partners and Convergence Ventures.

Car marketplace models like Carsome's have been around in many markets globally, some of which have already gone public or are close to an IPO listing. These include names like Carvana in the U.S., Chehaoduo in China and Cars24 in India.

Carsome is also actively weighing its options for a U.S. public listing in 2022, either via a special purpose acquisition company (SPAC) or a traditional IPO, according to a source.

For the original story from DealStreetAsia, click here.

DealStreetAsia is a financial news site based in Singapore that focuses on private equity, venture capital and corporate investment activity in Asia, especially Southeast Asia, India and greater China. Nikkei owns a majority stake in the company.

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