Carro, parent company of myTukar, announces record EBITDA for FY 2023, on track to grow 10X EBITDA for FY 2024

MyTukar’s parent company, Carro, reported record EBITDA (earnings before interest, taxes, depreciation and amortization) for the most recent fiscal year ending March 2023.

It achieved an EBITDA of US$4 million over a 12-month period. More impressively, the ARR (annual running rate) reached US$35 million at the end of the fiscal year. This means that based on the monthly recurring rate of return until the end of 2023, it is predicted that Carro will be able to reach a profit of US$35 million in the next 12 months. Indeed, according to Carro CFO Ernest Chew, Carro is expected to post 10x EBITDA growth for fiscal year 2024, or US$40 million.

“Not only have we hit a record EBITDA in FY 2023, our annual EBITDA is on track with an EBITDA margin of ~4%. We hope to achieve 10x EBITDA this year. Even if we don’t sell any cars, we’ll have super positive EBITDA today. Almost 60% of our Gross Profit comes from recurring ancillary payments,” said Ernest Chew, CFO of Carro.

“This is the real benefit of a real, sustainable business model based on the ecosystem. We currently have almost no burning and active EBITDA activity across all of our core markets. We have also built a solid balance sheet and diversified our lending relationships with 17 financial institutions who have provided us with very competitive financing costs, ” he added.

Exactly how and how much does Carro make? Carro has sold and financed more than 120,000 vehicles across Indonesia, Thailand, Malaysia and Singapore. Gross margin in 2023 increased to 9%, with the final quarter ending on a high with a gross margin of 11%, more than double the gross margin of 2022.

This was underpinned by strong ancillary earnings growth, which accounted for nearly 60% of Carro’s Gross Profit in the final quarter. Genie, Carro’s fintech business, also recorded strong growth across the region and kept its bad debt ratio (NPL) at 0.2%.

Indeed, the rules of the auto industry even apply to tech unicorns. You know what they say about dealers, that selling cars isn’t really their business to make money, but the real money is made from all the support services like after-sales, insurance and purchase financing. car.

Carro has invested in building and promoting its after-sales capabilities. For example, in Malaysia, myTukar is currently running a promotion where you can get a 30% discount on a full car repaint at the company’s paint and body centres. You can repaint your car in 4 days or you will be compensated 50% of the bill if they are late.

Basically, even if you haven’t reached the point where you want to buy a car or trade/sell a car, Carro can still make you their customer, because everyone has to have their car serviced, renewed, and renewed. insurance, and so on.

VIDEO: Perodua Myvi owner is happy to be repainted by MyTukar

Currently, Carro is highly liquid, with $560 million in reserves consisting of cash, liquid/investment assets and financial receivables. It also has another $120 million in unapproved bank lines.

Carro uses bank lines for his Genie business. It borrows at a low fixed rate, and then distributes the loans according to Genie’s business at a high fixed rate, so it is not affected by volatile interest rates. The rate of return is the difference between two rates. By using artificial intelligence and data, it is able to keep the bad debt ratio low.

Genie’s current loan is now more than $350 million, and it is earning interest on that loan. This means that Carro is not only an automotive technology company but also a fintech.

While Carro has plenty of money in the bank and its finances are doing well, its main competitor is Carsome told Radio BFM In an interview, the company has yet to break even but plans to do so this year. Last year, it was reported that Carsome had a layoff exercise in September 2022.

Although you often see people on the yellow team in photo sessions with government officials, Malaysia’s money is on the orange team. Malaysian government-linked fund Permodalan Nasional Berhad (PNB) participated in Carro’s last round of Series C expansion in November 2021. Carro also received investments from Sime Darby and DRB-Hicom.

PNB injected US$25 million (RM115 million at today’s exchange rates) along with US$30 million from Temasek as part of a US$100 million round, which is an extension of its 360 million Series C. US dollar was previously led by Softbank Vision Fund 2.

Since then, Carro has not needed to raise any additional funding beyond strategic investments, such as the recent February 2023 investment from insurance technology company ZA Tech to transform the experience. auto insurance experience in the markets where Carro is present.

“We are highly focused on improving profitability and unit economics while optimizing productivity and cost structure,” said Aaron Tan, Co-Founder and CEO of Carro. It’s not about selling more cars; It’s about getting more value and recurring income.”

“As other businesses continue to focus on GMV growth at all costs, we have a strategy of doubling down on building a sustainable business model and leveraging our ecosystem to drive a variety of side activities. support more periodically over the entire user and ownership lifecycle. Our financial technology and mobile businesses have made significant strides in fiscal year 2023. We have also laid the groundwork for stronger growth in our security technology business. risk through strategic partnerships with ZA Tech and MSIG. , as well as after-sales,” he added.

After all, there’s no reason to be “number one” if you’re also the best loser, right?