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Growing Internationally with Carro

How an AI-driven Singapore start-up revolutionize the used car marketplace in Southeast Asia and achieved unicorn status

When Aaron Tan and two classmates from Carnegie Mellon School of Computer Science founded auto marketplace Carro in 2015 the sector was ripe for disruption. Digital-savvy consumers who were keen to buy used cars online had to navigate an opaque marketplace. Both buyers and sellers lacked confidence about the pricing and quality of vehicles on offer.

Tan and his co-founders set out to challenge the status quo and bring transparency and trust to the online used car market. The first step was certifying the quality of Carro cars with a 160-point inspection, supported by warranties and guarantees. A range of services across the entire car ownership ecosystem quickly followed, including vehicle financing, insurance, after-sales services and subscription ownership services. “We wanted to take the hassle out of car ownership and make the business front-of-mind for anyone wanting to buy or sell a vehicle in Southeast Asia,” says Tan.

The company swiftly achieved its ambition. Just five years after launch, Carro had achieved unicorn status and become the region’s largest AI-powered automotive marketplace. Headquartered in Singapore, the company has expanded into Malaysia, Indonesia, Thailand, Taiwan and Japan. The network sees about USD 2 billion gross merchandise value annually.

Regina Lee, Head of Commercial Banking, Singapore

Regina Lee

Head of Commercial Banking, Singapore

We are delighted to be supporting companies like Carro on their growth journeys and expansion into new markets

Carro’s growth story has been supercharged by technology. From the outset the company harnessed the power of AI and machine learning. The inspection process is sped up through ‘computer vision’ – software that scans images of the car to detect defects such as dents, scratches and paint deterioration. Proprietary algorithms ensure competitive prices and fast approval on finance deals, while acoustic engineering technology that infers driving skills from engine sounds enables behavioural-based insurance premiums.

Alongside data science and machine learning, innovative thinking has been a key driver of the company’s success. For example, when the pandemic struck, Carro pivoted to create the ‘Showroom Anywhere’, a concept that took vehicles into parking lots for contactless viewing and purchasing via an app.

Growth ambitions

From the outset the company had ambitions to expand. “We always knew that investors would want to know where we were going next,” says Tan. For the company to grow and expand internationally it was critical to find a likeminded, future-facing financial partner. “We were looking for a partner with a footprint that complemented ours, one that had a presence in all our jurisdictions,” explains Tan. “More importantly, as a digital-only business we wanted a bank that believed in digitalisation.”

From both these perspectives HSBC was a natural fit. “We started working with Carro in 2021. The company was one of the first clients to tap into our US$200 million tech lending fund aimed at start-ups seizing opportunities within ASEAN’s booming digital economy,” says Regina Lee, Head of Commercial Banking, Singapore. The loan gave Carro access to SGD25 million in trade finance to expand their inventory.

The HSBCnet banking platform ensures a quick turnaround for Carro’s ongoing trade finance applications, while the bank’s suite of digital solutions means the company can manage its cash efficiently and put excess cash to good use. “We can streamline all operations into a single bank account across all our markets. HSBC’s solutions allow us to be nimble and efficient as a business.” says Tan.

Looking to the future, Carro is keeping a close eye on the electric vehicle (EV) market, which Tan believes will provide a strong tailwind on the business. The company has an IPO on its roadmap at some point in the future, and ambitions to expand further. “Within six years we’ve expanded from a Southeast Asia company to an Asia Pacific company,” says Tan. “In the near-term, we might look into Vietnam and the Philippines.”

“We are delighted to be supporting companies like Carro on their growth journeys and expansion into new markets,” says Lee. “Our clients can confidently tap into our on the ground expertise, and we can support them with award-winning digital solutions that make banking simpler and smarter.”

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