CarDekho SEA, a Singapore-based auto financing service platform, has successfully raised $60 million in equity funding from Navis Capital Partners and Dragon Fund. This significant investment values the company at over $300 million. The latest round of external funding follows a previous investment of $40 million from its parent company, CarDekho Group.
Expansion Plans in Southeast Asia
The company plans to utilize the funds raised to further expand its presence in Southeast Asia. Specifically, CarDekho SEA aims to focus on the used car and bike financing industry in Indonesia and the used auto financing sector in the Philippines. Umang Kumar, co-founder and president of CarDekho, highlighted that acquiring a used car financing platform or insurance brokerage platform in these countries could be one of its strategies to increase their presence in the region.
"We do have a couple of assets lined up in terms of what we will look at," Kumar said in an interview with TechCrunch. "You may hear something along those lines within a month or two… We will actively look at acquiring activities. The idea is not completely organically built. So, we will look at some inorganic acquisitions as we build out our business across Southeast."
Background and Presence
Founded in 2020, CarDekho SEA already has a significant presence in Indonesia (OTO Indonesia) and the Philippines (Carmudi Philippines and Zigwheels Philippines). The company is also operational in other Southeast Asian markets such as Thailand, Singapore, Malaysia, and Vietnam. With plans to expand into new markets by 2026, CarDekho SEA’s growth trajectory is certainly an exciting one.
Acquisitions and Partnerships
The company’s acquisition spree began with the initial joint venture partnership in Indonesia between 2019 and 2020. Later, it acquired Carmudi, which operates in the Philippines, Indonesia, and Thailand, to expand its presence in SEA. Unlike its peers, CarDekho SEA acts as a comprehensive aggregator for auto financing services.
"We initially had a joint venture partner in Indonesia but later bought out the local partner entirely, becoming the 100% owner of the entity," Kumar explained. "Our acquisition spree continues as we look to expand our presence in Southeast Asia."
Competitive Edge
CarDekho SEA highlights its edges over peers in the industry. Its technology-driven loan procedures, asset-light marketplace approach with no credit risk, extensive network of used car dealers and agents, and solid collaborations with financial institutions make it stand out.
"We act as a comprehensive aggregator for auto financing services," Kumar said. "Our platform aggregates demand from individual dealers, connecting them to a wide network of financiers and offering access to various financial products."
Growth and Revenue
Since its launch, CarDekho SEA has experienced significant growth. The company has made over 200,000 disbursements and disbursed over $1 billion in loans. This represents a 50x increase in gross merchandise value over the past three years.
The company generates upwards of $50 million in revenue annually through per-loan commissions with financiers. Its primary customers are small-scale used car dealers who often have less than ten cars in stock or no physical showroom at all.
Challenges and Opportunities
CarDekho SEA’s CEO highlighted the challenges faced by small-scale used car dealers due to their sub-scale presence. Financiers often find it challenging to serve them directly, which is where CarDekho SEA comes in – providing a platform that aggregates demand from these individual dealers, connecting them to a wide network of financiers.
"We offer access to various financial products, making it easier for small-scale used car dealers to obtain financing," Kumar said. "This is an opportunity for us to expand our presence in Southeast Asia and help more dealers gain access to the necessary funds."
Conclusion
CarDekho SEA’s latest round of funding from Navis Capital Partners and Dragon Fund values the company at over $300 million. With plans to focus on the used car and bike financing industry in Indonesia and the used auto financing sector in the Philippines, CarDekho SEA is certainly an exciting company to watch.
As it continues to expand its presence in Southeast Asia, CarDekho SEA’s competitive edge will undoubtedly be a key factor in its success. With technology-driven loan procedures, an asset-light marketplace approach with no credit risk, and solid collaborations with financial institutions, the company is well-positioned for growth.
Only time will tell what the future holds for CarDekho SEA, but one thing is certain – the company’s presence in Southeast Asia will be felt for years to come.