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Treasury & Capital Markets
Carro first to tap HSBC’s Asean Growth Fund
Used car marketplace one of very few technology start-ups operating profit positive
Tom King 24 Jun 2024

Singapore-based Carro, Southeast Asia’s largest used car marketplace, is the first of the bank’s clients to tap into HSBC’s recently launched US$1 billion Asean Growth Fund, signing a S$75 million (US$55.3 million) multi-currency loan to fund its fintech arm.

Southeast Asia’s US$218 billion digital economy is among the world’s fastest growing with used cars one of the largest consumer segments in the region worth at least US$60 billion by transaction value.

Carro is currently present in seven markets, having just entered Hong Kong and Japan, and the firm generates nearly US$1 billion in revenues. It recently achieved over 11 times year-over-year ebitida (earnings before interest, taxes, depreciation and amortization) growth to hit a record US$34 million and is one of very few technology start-ups to be operating profit positive, based on its latest financial year-ending March 2024.

“Our fintech business, leveraging proprietary data-driven lending, has been growing prudently with a loan book exceeding S$500 million and non-performing loans below 0.5%,” says Aaron Tan, the company’s co-founder and CEO. “Securing this financing is a huge validation of our digital ecosystem-led business model, enabling us to serve the underserved consumer segment even better.”

Ernest Chew, chief financial officer of Carro, adds: “This [financing] significantly strengthens our balance sheet and diversifies our funding channel particularly in Malaysia, so that we can focus on growing our business more effectively. This will add another S$75 million to our existing liquidity of nearly S$350 million as of recent financial year end.”

The bank, it notes, has embarked on a commitment to support leading high-growth companies in the region’s booming digital economy, providing much needed working capital to firms to achieve economies of scale and grow their asset base.

Amanda Murphy, the bank’s head of commercial banking for South and Southeast Asia, notes: “Asean’s booming digital economy has so much potential for growth as the region’s digitally native working population consumes more goods and services online.”

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