Entrepreneur Aaron Tan was going to start a business. As a former venture capitalist who spent his twenties investing in start-ups across the U.S. and Southeast Asia, Tan learned early on to evaluate companies based on their current model and ability to scale.
So when he saw momentum growing in the auto industry in the mid-2010s, he saw huge potential. At that time, ride-hailing took off in the U.S., and so were auto trading platforms and sophisticated financial services around car ownership. Yet, in Tan’s native Southeast Asia, the industry was still nascent. For him, it was an opportunity waiting to be taken.
“What drew me into this whole industry … the opportunity I saw was the neighborhood,” said Tan. “When we talk about neighborhoods, we are talking about the adjacencies we can get into—for instance, financial services, insurance, warranties, and loans. Or after sales, things like fixing and repairing vehicles,” he said.
So in 2015, Tan teamed up with his college friends to launch Carro, an artificial intelligence-enabled car trading platform allowing buyers and sellers across Southeast Asia to compare the best deals. Then, in the years that followed, the company expanded into end-to-end financial services, like loans, insurance, aftercare products, and a car subscription service.
“All those opportunities are [$10 billion to $20 billion] vertically, across the region. I think it is a given. That is what drew us to do something in this space,” he said.
It wasn’t just Tan and his co-founders who saw potential, either. Initially, Tan pulled together $1 million from four friends to kickstart the business. Since then, the company has raised more than half a billion dollars, including $360 million in recent funding from Softbank and Indonesian-based fund EV Growth. The six-year-old company is now valued at $1 billion.
Tan said the latest investment would help Carro expand into each of its “neighborhood” services. “Going deeper in each neighborhood is my number one thing. Number two [is going] broader into other countries. And third, as we’re in markets, we need to ensure that we get more of a market share,” he said.
Courtesy: CNBC Make it