Singapore’s Carousell snaps up rival 701Search as it seeks dominance in Southeast Asia

SINGAPORE, Nov 21, 2019, SCMP. Singapore-based mobile classifieds company Carousell announced on Thursday that it was merging with online classifieds company 701Search in its bid to become the industry leader in Southeast Asia, South China Morning Post reported.

The cash and equity agreement between Carousell and Telenor Group, which owned 701Search, will merge 701Search’s online marketplaces Mudah in Malaysia, Cho Tot in Vietnam and OneKyat in Myanmar with Carousell.

As part of the deal, 701Search’s regional hub team that operates in Singapore will be fully integrated into Carousell, while Mudah, Cho Tot and OneKyat will continue to operate under their respective names following the merger, according to a Carousell press release.

The merger brings Carousell’s value up to US$850 million, from US$560 million earlier this year. Norwegian telecommunications company Telenor Group will own 32 per cent of the merged entity, making it the largest minority shareholder, Carousell said in the statement.

The merger comes just months after a US$56 million merger between Carousell and another classifieds platform, OLX Philippines, in July.

“Our mission has remained the same since day one. We want to inspire every person in the world to start selling and buying,” said Quek Siu Rui, chief executive of Carousell. “Merging with 701Search will allow us to further this mission on an even greater scale and fortify our leadership in Southeast Asia.”

Carousell, co-founded by Quek, Marcus Tan and Lucas Ngoo in Singapore, has become one of the country’s most well-known start-ups. It is widely credited with pioneering the “snap, list, sell” mobile classifieds model, which allows users to list an item for sale quickly by snapping a photo of it on their phones.

The online marketplace now operates in eight markets including Singapore, Malaysia, Taiwan and Hong Kong, and has sold over 70 million items since its inception over seven years ago. It is expected to bring in over US$40 million in revenue this year and is profitable in two markets, the company said, without specifying which the profitable markets were.

“This transaction presents an attractive opportunity for us to take the next step in our marketplace journey, and it also simplifies Telenor’s portfolio,” said Johan Rostoft, head of online classifieds at Telenor Group. “We believe that Carousell is the best partner for our online classifieds business in Southeast Asia.”