Kuala Lumpur-based automotive marketplace operator iCar Asia has reportedly signed a binding agreement to acquire online marketplace rival Carmudi Indonesia. The acquisition is the company's latest move to capture a much larger market share in Southeast Asia's rapidly growing used car market.
According to a statement from iCar Asia, the transaction is expected to be completed on October 15. The agreement between both companies will involve a payment of around $3 million to fully acquire the company. The $3 million will reportedly be paid in two installments. iCar Asia will pay $2 million upfront and another $1 million by October when the deal is completed.
The Malaysian company already owns and operates a number of automotive market places in Indonesia. This includes websites such as OtoSpirit.com and Mobil123.com. When the acquisition of Carmudi is completed, iCar Asia expects to double its revenues from its operations in Indonesia.
iCar Asia first entered Indonesia, the region's largest economy, back in 2012. Since then, the company has been aggressively trying to capture more market share in the online used car market. In 2014, iCar Asia acquired automotive classifieds website Mobil123, significantly increasing its market share.
The publicly listed company is aiming to become the largest network of online automotive websites in Southeast Asia. The company claims that it has the potential to connect more than 600 million car buyers and sellers across the region through its various web portals and services.
The company's acquisition of Carmudi may eventually allow iCar Asia to achieve its ultimate goal. Carmudi is currently one of the largest automotive marketplace websites in Indonesia and the Philippines. The website gets more than 2 million visits per month. Carmudi recently raised more than $10 million in a Series C funding round earlier in the year from Asia Pacific Internet Group.
Apart from connecting buyers and sellers online, Carmudi also has a number of bricks-and-mortar sales centers called "Carsentros." Through the centers, buyers and sellers can avail of a wide variety of services, including car financing.
The used car marketplace business in Southeast Asia is continually growing and more players are now trying to take advantage. Some of the more successful players in the space include sites such as Carsome, Carro, and BelimobilGue.
Online marketplace website Carro recently raised around $30 million in its Series B funding round. The company also recently acquired Indonesian marketplace platform Jualo to further its expansion. Meanwhile, its rival BeliMobilGue had received a $30 million investment commitment from Berlin-based joint venture partner Frontier Car Group to expand its business.
