Singapore-based startup Carousell is in the money this week after it closed a Series C round of between $70-$80 million, two sources with knowledge of the deal told TechCrunch.
Started by three graduates from the National University of Singapore in 2012, Carousell operates a mobile-first listings service for second-hand goods and services in Southeast Asia, Taiwan and Hong Kong. Prior to this new funding it had raised $41 million, including a $35 million Series B in August 2016, from investors that include Rakuten, Sequoia Capital, Golden Gate Ventures and 500 Startups.
Carousell did not confirm the new round. It instead supplied TechCrunch with the following statement:
At Carousell, we are laser-focused on our mission of building a system to inspire everyone in the world to start selling. Since our US$35M Series B funding in August 2016, we’ve expanded rapidly from 35 million listings to now over 95 million listings globally as of September 2017. We are always looking to get in touch with new investors and partners to help us reach our goals. We don’t have updates on funding-related news to share at the moment, but we will be in touch when we have a significant update to share.
Carousell is one of a number of startups to have emerged inside Southeast Asia’s fast-growing e-commerce space.
With an estimated 3.8 million people coming online for the first time each month — mostly via mobile devices — the region, which houses over 600 million consumers, is seen as one that could grow to become important alongside China and India.
A 2016 report co-authored by Google forecast Southeast Asia’s e-commerce market to grow from $5.5 billion in 2015 to $88 million by 2025, and that explains why a range of companies are investing heavily. Newly NYSE-listed Sea (formerly Garena) has put millions into its Shopee app, Alibaba has invested in e-commerce startups Lazada and Tokopedia, Tencent and ally JD.com are scouting the region, and U.S. giant Amazon arrived on Southeast Asia’s shores this year, too.
One source explained to TechCrunch that, despite that bevy of well-funded players, Carousell has carved out a niche for itself as a second-hand goods market. The startup initially began life in consumer-to-consumer sales — its mobile app made selling unwanted items easy — but it has repositioned itself as a listings site now that Southeast Asia’s e-commerce market has been mainstream for a few years old and people have accumulated enough items that some are unwanted/unused or ripe for resale.
To support that point, TechCrunch understands that Carousell’s annual GMV — gross merchandise volume, which indicates the total value of goods sold across a platform — is at $5 billion.
That is some way higher than most rivals. Shopee — which covers Southeast Asia and Taiwan — did $1.15 billion last year and, based on the first half of 2017, is on track for $3 billion. Lazada, meanwhile, no longer reveals figures but it claims to be ahead of Shopee.
While GMV has direct correlation to revenue for e-commerce services like Shopee and Lazada, it is a less relevant revenue metric for Carousell.
That’s because, as a source explained to TechCrunch, Carousell has elected for a business model through which it only monetizes selected verticals. Those are automotive, jobs, property and services — areas that are typically used by commercial/professional entities.
That’s a smart move because not only are these goods typically higher in terms of basket size and margin, but paying customers — i.e. the providers of the goods and services that are bought — are likely to be repeaters. It also means that the long tail of consumers can continue to use Carousell to sell their unwanted goods without incurring fees. That engagement might drive them to use verticals that Carousell makes revenue on.
Monetization for the service had always been unclear, but things seem to be progressing nicely — in no small part thanks to three acquisitions made over the past year.
The number of listings on the service has more than doubled from 45 million last year to 95 million today. While our source revealed that the company is on track to reach double-digit million US dollar revenue this year.