Aaron Tan is moving places. The CEO of Carro, Aaron Tan, is on his way to a public listing. He's the co-founder and co-founder of a recently crowned unicorn. With Softbank as his investor, he doesn't plan to slow down. "How do we get to $10 billion now that we have hit $1 billion?" How can we reach $100 billion? Tan spoke to CNBC Make It.
I would not say that I co-founded the company with my co-founders... Aaron Tan, co-founder and CEO of Carro
Carro, a play on "car hero", is an online marketplace for Southeast Asian autos. It simplifies car sales by using artificial intelligence technology. It was founded by Tan, his college friends Aditya Lemana and Kelvin Chung in 2015. In June 2015 it received $360 million funding and achieved the coveted status of a $1 billion unicorn. This deal brings the total amount raised to more than half a million dollars. It places Carro alongside key competitors such as Carsome Malaysia and Carmudi Germany in an industry that is worth $50 billion. It was a long journey, Tan said.
Be driven to succeed
At the age of 13, the 36-year old's entrepreneurial journey began. Growing up in Singapore, the computer wizard would make extra money by selling and building websites. Later, he realized a way to combine his business skills with his true passion, trading cars.
Aaron Tan, founder and CEO of Southeast Asian autos market Carro. Carro
"When I was in America as a VC for many decades, I can clearly recall meeting all sorts of automotive companies such as your Beepi or your Uber and your DriveShift. Tan said that this was what showed him the momentum in the sector. The U.S. auto resale industry was thriving, but the opposite wasn't true for Southeast Asia. It was notoriously opaque with many middlemen making it difficult to find the best deals for sellers and buyers.
We saw a shift in car ownership. Aaron Tan, co-founder and CEO of Carro
Tan wanted to change this. Tan returned to Singapore in 2015 to work with his fellow classmates at Carnegie Mellon's School of Computer Science. They created an algorithm to do exactly that. Tan said that while he wouldn't claim that he tricked his co-founders into starting the company together, he believes a sales pitch that I made convinced them that it was more interesting than what they were doing.
Tap into a rapidly-moving market
They were right. The region has a large and growing middle class that is digital-savvy, so price-sensitive buyers were more inclined to buy second-hand models. CNBC Make It reported that the key factors for new car sales were the expanding middle class and low car ownership rates in Southeast Asia.
Autos marketplace Carro launched Singapore's first car subscription service in 2019. CNBC
Carro was able to capitalize on this demand by launching its online offerings for individuals and wholesalers in Indonesia, Thailand, Malaysia, and other countries. It also added financial services such as loans, insurance, and aftercare. In 2019, the company launched Singapore's first subscription car service. Users could lease a vehicle at a monthly cost, including tax, warranty and maintenance. "What we observed was the shift in car ownership. The gap in the market was to find people who want this flexibility. Tan said that people want to test out new cars, and more importantly, Tan stated that.
How to navigate the pandemic
In 2020, the pandemic hit. Tan and his team saw this as a huge roadblock, but it turned out to be a great opportunity. Private transport options were in demand due to safety and hygiene concerns. With the global shortage of microchips limiting production and closing borders, used car sales soared.
Covid has certainly helped us accelerate our digitalization both internally and externally. Aaron Tan, co-founder and CEO of Carro
Tan stated that "Covid has certainly helped accelerate our entire digitalization internally as well as externally, to a general audience." The company also launched a contactless "Showroom Anywhere", which allowed potential buyers to see and test-drive cars in a virtual environment. Instead, they could access the vehicle in a public parking lot by entering a contactless QR code. Carro's revenues increased 2.5 times to $300 million in March 2021. Six-year-old startup Carro claims it is now profitable.
The path to an IPO
This growth is occurring against the backdrop of increasing scrutiny on auto industry. Transport accounts for nearly 25% of global carbon emissions (24%) and road vehicles account for 75%. Even though automakers and governments are working together to replace traditional combustion engine cars by electric vehicles, many of the existing gas-guzzlers continue to be exported to developing countries. Carro said that it plays an important part in the transition towards greener transport methods.
Carro claims it is helping to transition to greener transportation methods by allowing buyers to test new cars, such as electric ones. Carro
