Carsome announces first EBITDA positive quarter in Q1

Carsome announces first EBITDA positive quarter in Q1

Eric-Cheng, CARSOME co-founder, chairman and group CEO

Malaysia-based used car marketplace Carsome Group has turned Ebitda positive for the first time in the January-March (Q1) quarter of 2024. It had posted a positive Ebitda in the month of December 2023.

In a statement on Tuesday, Carsome said a key factor contributing to this milestone was a 48% year-on-year increase in gross profit per unit (GPU), augmented by the company’s AI-driven pricing engine for accurate price predictions.

“The profitability milestone is not just a financial metric; it validates our business model and underscores our potential for long-term success. Having achieved profitability, we are poised for sustained growth, capitalising on the considerable scale of our business in the region,” said Carsome’s co-founder, chairman and group CEO Eric Cheng.

“We are strategically expanding our services across the industry value chain, uniquely underpinned by our ownership of transactions—a distinct advantage in Southeast Asia,” he added.

The company said that further gains in GPU were supported by improvements in transaction margins and the use of data analytics, digitisation, and automation across its operations, including financing, insurance, and after-sales services through Carsome Capital and Carsome Aftersales.

This integration, it said, increased ancillary income per unit by over 80% in 2023.

For the year ended December 2022, Carsome posted a loss of $15.22 million, narrowing by 80% YoY according to DealStreetAsia DATA VANTAGE.

Carsome also reported that it sold over 150,000 cars last year, bringing the total number of cars sold since its launch in 2015 to over 500,000. It said operational efficiencies have reduced customer acquisition costs (CAC) by 37%, driven by strong brand equity and streamlined customer services across the region.

Carsome Capital, the group’s financing and insurance arm, saw an over 80% increase in 2023 revenues, and a 3x year-on-year growth in profit before tax (PBT), marking its second consecutive year of net profitability.

Customer satisfaction in Carsome Certified, the company’s retail line, has risen from a 77 Net Promoter Score (NPS) to 83, while its wholesale business scored a 76 NPS. Additionally, it said its digital monthly active users increased to over 18 million, up from 15 million in 2022, through its content and media ecosystem.

“While we are on track to achieve the group’s first full-year profitability this year, we are also continuing our long-term vision of driving profitable growth and extending our leadership in the region and the industry,” said Cheng.

Carsome told Forbes last October that its valuation has stayed at $1.7 billion after it raised $290 million in Series E round last January. Its investors include Qatar Investment Authority and Temasek’s 65 Equity Partners, 500 Southeast Asia and several Malaysia-based investors such as Gobi Partners, Malaysia Venture Capital Management (MAVCAP) and Vynn Capital.

Together with its subsidiary brands iCar Asia, WapCar, and CarTimes, Carsome provides end-to-end solutions for consumers and used car dealers.

Edited by: Pramod Mathew

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