Despite its efforts, Singaporean start-up Carro has been finding it difficult to help car buyers have their loans approved in a timely enough fashion. This turned out to be a major issue as a significant percentage of consumers in Southeast Asia rely on credit to buy their cars. Since car buyers who fail to obtain credit cannot afford to buy cars, Carro decided to come up with its own financing facility to help users get the money they need to buy cars on its platform.
To keep its operations simple and streamlines, Carro set up a subsidiary, Genie Financial Services, whose main purpose is to make car financing easier and faster. Carro’s CEO Aaron Tan observed that the new company uses its own credit engine that enables staff members to underwrite loans in an innovative way. Unlike traditional banks, Carro knows a low about cars and the way in which car buyers and sellers think. As a result, the company has been able to collect a lot of data which was used to develop a unique set of algorithms. Since Carro buys and sells vehicles on a regular basis, its team members understand how the value of each vehicle changes over time.
Being Genie a distinct company, its operations and team will be managed by CEO Helen Neo, who has been working in the automobile financing industry for over three decades. Carro and Genie will use the same technological equipment to calculate loans based on each applicant’s risk profile. Buyers’ creditworthiness will be assessed by evaluating a large amount of financial data, as well as information extracted from users’ social media profiles. The new platform will feature a chatbot service that will allow users to compare various financing options. Carro got the funds to set up Genie from a number of undisclosed backers who invested US$12 million in the new venture. The company’s previous investors, including Singtel Innov8, Venturra Capital and Golden Gate Ventures, also contributed to the project.
The rest of the money will be split among the company’s markets in South-eastern Asia – i.e. Thailand, Singapore and Indonesia. As Tan pointed out, the newly-raised capital will enable Carro to cooperate with banks on underwriting loans.
The used car marketplace is currently looking into new ways to buy and sell vehicles. Its hard work has led to Carro Express, an innovative service that enables users to sell their cars directly to Carro. This way, the seller can get their money straight away instead of having to wait for buyers to place their offers. Carro then resells the vehicles to buyers through its own website / app.
According to Tan, the service is meant to make it even easier for users to sell their cars and is going to make a huge difference as it can sometimes take up to two or three weeks for sellers to finalize the deal and get their money.
Carro will keep rolling out new services related to car ownership.
Carro has recently launched a number of innovative services, including Graph.sg, an online calculator that allows users to estimate the value of their vehicle, Carro Accessories, an e-commerce website for automobile-related gadgets, and Carro Workshop, a mobile app that helps users find excellent repair shops around them.
The company intends to keep rolling out new services related to car ownership, even though Tan hasn’t shared any additional information on the topic. Carro’s new financing service is currently available in Singapore as that is where it is most needed. Tan added that the company will keep adapting its existing services to each market in order to meet consumers’ specific needs.
The Singaporean used car market is currently dominated by Carro and Caarly, a successful startup established by Carousell to launch the Carousell Motors platform. In Vietnam, the company faces intense competition from Caramo, which relies on machine learning to establish fair prices for both sellers and buyers. Caramo was launched this month after raising sufficient capital through angel funding.
Tan believes that Carro’s position is strong enough for the company to retain its competitiveness. What distinguishes Carro from its rivals is its level of specialization as well as its team’s expertise within the automobile industry. Tan sees Carousell’s decision to develop an app for used cars as an opportunity, rather than a threat. Following the company’s US$5.3 million series A fundraise, he hasn’t provided any additional details concerning Carro’s progress or financial performance. However, recent estimates suggest that the company may have helped its users sell over US$120 million worth of cars last year.
The startup intends to keep focusing on its existing markets until the next round of venture capital financing.