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Forbes | Malaysia’s Carsome, Tycoon Patrick Grove’s Catcha Group To Take ICar Asia Private In $200 Million Deal

Originally written by Jonathan Burgos and published by Forbes.

Malaysia-based used car platform Carsome Group said Tuesday it has partnered with Catcha Group—controlled by tycoon Patrick Grove—to take Australian-listed rival iCar Asia private in a deal valued at $200 million.

Under the proposed deal, Carsome will buy 19.9% of iCar Asia from Catcha in a share swap that will make Catcha a shareholder of Carsome. The duo will then acquire the remaining 80.1% in iCar Asia.

The transaction comes as Carsome is reportedly planning to list in the U.S. at a $2 billion valuation, either through a backdoor listing with a special purpose acquisition company or via a conventional initial public offering.

“This is the first step toward consolidation to form the largest digital automotive group in terms of revenue, user base, largest live listings, and the best end-to-end fulfillment capability in the region,” Eric Cheng, cofounder and group CEO of Carsome, said in a statement.

The combined entity is targeting revenues of $1 billion this year across the used-car buying and selling online platforms in Malaysia, Thailand, Indonesia and Singapore. The transaction also cements Carsome’s position as Southeast Asia’s most valuable digital automotive marketplace and Malaysia’s first tech unicorn, the company said.

“We are excited to join Carsome as shareholders and work with Eric and his team to expand our leadership position and look forward to helping the combined business dominate the $55 billion digital automotive space in Southeast Asia in the years ahead,” Grove, founder and group CEO of Catcha, said.

Grove, 46, has interests in digital businesses through privately held Catcha Group and Australia-listed Frontier Digital Ventures. In May 2020, he sold on-demand video service Iflix for $50 million to Chinese tech giant Tencent. With a net worth of $365 million, Grove was ranked No. 45 on the Malaysia Rich List that was published last month.

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The Edge Markets | Carsome and Catcha team up via acquisition of iCar Asia, creating largest digital automotive marketplace in Southeast Asia

Originally written by Joyce Goh and published by The Edge Markets.

Carsome Group announced today that it is acquiring 19.9% of Australia-listed iCar Asia Ltd from Catcha Group.

It added that Carsome and Catcha Group have made a joint proposal to the independent directors of iCar Asia to acquire the balance of 80.1% of iCar from its shareholders.

The total transaction is estimated to be worth more than US$200 million, said Carsome in a statement.

Catcha Group will become a shareholder of the Carsome Group in exchange for the sale of its shares in iCar Asia to Carsome, it added.

“Carsome and iCar Asia, combined, offers an integrated automotive ecosystem — for dealers to source, advertise and sell cars; and, for consumers to research, sell and buy cars — in a region that trades over US$55 billion worth of automobiles annually,” Carsome said, noting that it is the market leader in the online used car buying and selling platform across Malaysia, Thailand, Indonesia and Singapore, while iCar Asia is the leading listings and content automotive platform across those same markets.

Carsome added that the proposed integration between Carsome Group and iCar Asia offers significant strengths such as a target US$1 billion revenue for 2021 and the largest automotive data set that has around 100,000 cars transacted annually with over 10 million monthly unique visitors visiting the platforms.

Carsome said the proposed acquisition of iCar Asia offers an enhanced suite of digital products and services to more dealers and consumers in all key markets.

The expanded suite of solutions will offer an end-to-end, super-app experience that covers the entire car buying and selling value chain, it added.

It also noted that consumers will enjoy a seamless, one-stop solution as Carsome Group expands its offerings to span the whole car ownership journey — from search, transaction, finance and insurance to after-sales services.

Carsome’s co-founder and group CEO Eric Cheng will lead the Carsome Group as CEO, and the group welcomes Catcha’s co-founder and Group CEO Patrick Grove’s support as one of the founders alongside Cheng and Jiun Ee Teoh to drive the future growth of the business.

“We are excited to have Patrick join us as he brings along two decades of tech entrepreneurship and capital market expertise. This transaction is an important part of our growth strategy to build the entire automotive ecosystem in Southeast Asia and part of how we are transforming the industry through trust, transparency and technology,” said Cheng.

“This is the first step toward consolidation to form the largest digital automotive group in terms of revenue, user base, largest live listing, and the best end-to-end fulfilment capability in the region.”

When contacted on this, Grove said: 'The combined business is on track for US$1 billion in revenue this year, making us one of the largest internet companies in the region, and definitely the largest in Malaysia.”

“Bringing iCar Asia’s extensive traffic and dealer network in the region together with Carsome’s leadership position in automotive e-commerce is extremely powerful. We are excited to join Carsome as shareholders and work with Eric and his team to expand our leadership position and look forward to helping the combined business dominate the US$55 billion digital automotive space in Southeast Asia in the years ahead,” he added.

When asked if there are IPO plans for this new combined entity, Grove decline to comment.

Just last month, Bloomberg quoting people with knowledge of the matter, reported that Carsome is weighing going public in the US in a deal that would make it Malaysia’s first unicorn.

The wires added that Carsome is working with advisers and is seeking a valuation of about US$2 billion in a listing, which could be a merger with a special purpose acquisition company (SPAC) or a conventional initial public offering.

Meanwhile, earlier this year in February, Catcha Group announced the pricing of its SPAC Catcha Investment Corp initial public offering of 27.50 million units at a price of US$10.00 per unit on the New York Stock Exchange.

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e27 | iMedia acquires BeautifulNara to expand its digital media footprint within Malaysia

Originally written by Tun Yong Yap and published by e27.

iMedia, an integrated digital media group in Malaysia, today announced it has acquired a 90 per cent stake in BeautifulNara, a Malay language portal.

This deal marks the fourth acquisition by the group within the last three months.

With BeautifulNara joining OhMedia, Ittify and Goody25 in the group, the combined network will have a reach of over 13 million Malaysians, the company claimed.

As part of the acquisition, iMedia has signed an exclusive advertising representation agreement (EARA) with Nara Media, which will be responsible for the acceleration of revenue across websites.

In addition, it will build its content marketing business and introduce social selling as a new revenue platform.

Led by CEO Shahzeeq, BeautifulNara will continue to work closely with iMedia to focus on the overall expansion of its websites, including affiliated pages such as Amazing Nara, covering trending daily news and Kimchi Daily,  featuring all things KPOP. Together, they hope to build a larger community of Malay speaking audience and social media influencers.

Voon Tze Khay, CEO and Co-founder of iMedia, said: “This acquisition will further strengthen the company’s dominant position in the Malay language content network in Malaysia and our reach to the overall Malay urban youth speaking online community.”

“We will continue to build upon the revenue potential in sponsored content and video advertising that is in line with the rapid growth in the region’s overall digital advertising spend. We see this as an opportunity for a sustainable solution to generate greater revenue,” Tze Khay added.

Launched in 2013, BeautifulNara primarily focuses on the latest news in the local entertainment and lifestyle scene, as well as the trendiest stories on celebrities, fashion and travel.

The portal has social following of over 1.2 million followers on Facebook and Instagram combined, and recorded an average of 9.6 million page views and 1 million users per month.

In September, iMedia acquired a controlling stake in Goody Technologies, which runs the internet properties Goody25 and GoodyMY. This came just a few days after REV Asia signed an agreement to acquire iMedia

Also Read: Media buys controlling stake in Goody25’s Malaysian parent

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The Edge Malaysia | Digital Platform: A purely digital rental platform for an increasingly digital world

Originally written by Iriani Amirudin and published by The Edge Malaysia.

Renting a house is becoming a more viable option as the current market prices may be out of reach for many aspiring homeowners. In fact, according to commercial real estate services and investment firm CBRE Group, about a third of the population in the Klang Valley are renters.

That is why Catcha Group CEO Patrick Grove and its former chief of staff Eric Tan decided to start digital renting platform Instahome, which allows users to complete bookings as well as manage rental payments and maintenance services entirely online. This means users can confirm bookings and sign tenancy agreements without ever leaving their homes.

This comes as a result of its unique features, says Tan, the platform’s CEO. “It sprang from a shared personal frustration of having been a renter.”

When he was in the UK and planning his return to Malaysia, Tan looked for rental options and was left feeling disgruntled by the opaque renting process. Half of the agents he contacted did not reply, so he had to get the help of a cousin to visit a listing for him. “Signing the contract online just wasn’t an option back then too. I just had to pay the deposit and pray everything would work out,” he recalls.

The average renter in Malaysia would be familiar with the challenges posed by the rental market. Mainstream rental websites would have the same listing, but by different agents, as well as advertise inaccurate listings, says Tan.

Instahome prides itself on having 3D virtual tours for every listing as well as vetting the locations, through its in-house team, to ensure accuracy and authenticity. A third of the transactions have been completed without physical viewings, he says.

In addition to making sure the listings stay true to the pictures on the website, the vetting process is fairly straightforward. “We simply ask, against the asking price, is the place worth it? If you’re pricing it above a certain threshold, you have to justify it and provide more,” says Tan.

Instahome is backed with seed funding from Catcha Group, an internet investment company, as well as by Tan himself and a group of early employees. Prior to this, he was in charge of driving new investment opportunities at Catcha.

“I made it quite clear to Patrick [Grove] early on that my next step would be to build companies. My secret life mission is to build great companies that create good quality jobs. So, we decided to work on this together,” says Tan.

Instahome was launched in late October last year and is currently working with more than 300 licensed agents. The team deliberately started a company during the pandemic for two reasons.

“We were always digital-centric, but now you can see that digital solutions are more relevant. We saw the perfect opportunity to launch, and it is something that will benefit people too as they have to stay home and would be more reluctant to have physical viewings,” he says.

More consolidated experience

Buyers’ sentiment is improving as loan applications are at their highest in 10 years, says CBRE. This is supported by government efforts to promote home ownership. The Home Ownership Campaign (HOC), which was planned to scale down unsold stock, recorded sales worth RM17.66 billion (28,000 units), the firm adds.

Tan says if people can pay rent on time for five years, for example, chances are they can pay the mortgage on time too. Instahome consolidates rental payment behaviour and submits this information to credit bureaus, thus designing a tenant credit score system.

Long-term renters will benefit from this as it will be easier for them to apply for loans or mortgages. Instahome also vets the potential renters before confirming the booking. Post-booking, the platform reflects the changes on their credit score, depending on their rental payment history.

“We look at similar things such as how much you make and what percentage of that needs to be used for rent. We also screen the renters online such as through social media,” says Tan.

“Most people want to become homeowners eventually. We asked how we could help them. And we decided that this would be helpful, as well as getting support from credit bureaus. Renters can also collect rewards on the website when they pay on time and exchange these rewards for services or vouchers.”

Interestingly, Instahome also plans to bring about positive change with regards to discrimination in the rental market, using the data gathered from the credit score system.

“I think that no one is born a racist. Due to information asymmetry and maybe poor past experiences, some landlords are reluctant to lease out their property to a certain profile or group of people. We try to educate them with data and show them that it is a bias, and this shouldn’t justify the blanket treatment,” says Tan, adding that the platform is looking to expand to other states in Malaysia, and beyond.

by Super Admin

The Edge Malaysia | Building on trust to create a sustainable business

Originally written by Shaun Di Gregorio, Chief Executive Officer and Founder of Frontier Digital Ventures (part of the Catcha Group of companies) and published by Edge Malaysia.

When introducing Frontier Digital Ventures (FDV) to executives or investors, I’m frequently posed with this question - “Why bother with the instability of emerging and frontier markets?” We have investments in 17 countries like Pakistan, Philippines, Sri Lanka, Myanmar, Panama - places that one wouldn’t always associate with major investments. So it’s not really surprising that some might question our choice to focus efforts there.

FDV was built to be the world leader in online classifieds in frontier and emerging markets. I developed a passion for online classifieds during my time as General Manager of the REA Group and then leading the iProperty Group. Although the focus in the online classifieds space has changed from simply advertising houses or cars, to now connecting buyers and sellers and facilitating transactions, I am still fascinated at how unique the online classifieds business model is from other digital businesses.

Most importantly, and in answer to my investors’ question, I’ve found the greatest impact and satisfaction has come from working with A grade entrepreneurs in these local markets to accelerate them - something which I don’t think I would have achieved at the same scale in other markets.

And the surprising ingredient to all this success?

Well, I discovered that our platforms worked because we were building trust between buyers and sellers.

You see, these frontier and emerging markets where FDV is present, tend to operate in a “low-trust” environment. Put simply, there is a lack of trust between buyers and sellers – or what we call a ‘trust deficit’ – they don’t tend to trust each other because of previous bad experiences such as scams or misrepresentations. These abound in an environment where regulations are less clear, and when a quick buck can be more appealing than investing in creating an actual long-term business.

In low-trust societies, transactions don’t happen as fast or as frequently as they should - simply because consumers are always questioning if they’re getting a fair deal.

That’s where platforms like Encuentra24.com, Infocasas and CarsDB come in.

They’re more than just websites with free features for consumers. Together with the brilliant founders of our portfolio of businesses, we design digital environments which are transparent and interactive. Imagine if a buyer finds that a seller has acted with less than complete honesty, that seller is going to be called out immediately for all the platform’s users to see!  In essence, our community of buyers and sellers are able to self-regulate because of the open and transparent platforms we provide.

Designing for trust

To be honest, we didn’t originally design our business with trust in mind. We did, however, know that we wanted to provide the best experience for our users, and build sustainable future-proof businesses. And I guess, that’s essentially what trust is!

So, can you purposely design your business for trust?

I believe so and here’s how we did it at least:

1. Thinking back to our early days, many of iProperty’s competitors suffered from fake property listings which greatly impacted how consumers viewed their brand. Back in 2010, I even found my own house (which I was living in at the time!) listed for rent on iProperty.com. When I called the agent to find out the details, he conveniently mentioned that it was recently rented out but he could show me other properties. Needless to say, the agent got some serious feedback about how they were advertising on iProperty!

Since then, it’s been very important to me personally that we verify sellers and listings across our platforms. And if we do find a fake listing (like my home!) then we go back to the drawing board to make sure that we improve the experience for our users. This is our way of being proactive about creating a platform our users can trust.

2. Consumer experience, CX, has been the buzz-phrase of the last few years. With the advent of technology, people are looking at how AI or big data analytics can help businesses better understand customer behaviors, and tailor services and actions accordingly.

But when your platform is dealing with potentially life-changing decisions-  buying your first condo or upgrading your car are major milestones for most - consumer experience takes on a whole different meaning. For many of our consumers, using our platform is a matter of spending their life savings.

So I stress to my team that it’s our duty in online classifieds to provide a seamless consumer experience, making the buying process as painless as possible. If this is done well the power of a positive experience for a consumer quickly takes hold by way of word of mouth and that’s the best reference any online business can hope for.

3. FDV couldn’t possibly have gotten off the ground if our investors didn’t trust us. They did so because of the reputation we built over the years, as our ability to source, grow and develop successful online classifieds businesses was proven by the success of iProperty.

But it doesn’t stop there.

I believe that we not only need to continue to cultivate the trust of our investors, but also to expand it. We continuously listen and communicate with them, so we can ensure our ideas and goals are constantly aligned and also to build an open and transparent relationship between both parties - a key in establishing trust.

The same applies to the entrepreneurs we back. Aside from providing the right capital to grow their business, our role as investors also includes matching opportunities for them and to ensure their growth. Time and time again, we deliver what we’ve promised and that provides for a more trusting relationship between us.

As the digital economy continues to grow bigger, the world is conversely getting smaller and smaller. People are more connected now than ever, and we need to understand how this changes their behaviors. Looking back at the “low-trust” environments FDV operates in - our users may not trust a stranger off the street or even in an office with their money, but they trust our digital platforms.

Here’s another example: Airbnb. We all know the story of how investors dismissed them because they didn’t believe strangers would trust others with their physical space, and how since they’ve been proven absolutely wrong. Today, Airbnb is a business worth USD38Bil.

Today, building a trustworthy brand may seem like something for businesses to “consider” - but in a few short years, it’ll be way past mere consideration. As the market grows increasingly demanding and sophisticated, any business that wants to survive the long-term will need to be designed to be trustworthy in the first-place. As Rachel Botsman, an expert on trust and technology, put so accurately, “Most businesses that we interact with are built around money, and money only goes so far. Money is the currency of transactions. Trust is the currency of interactions.”

by Super Admin