When a popular Tumblr blog has been set up to poke fun at your app users, it’s a sure sign that you’ve made it. Carousell, a Singapore startup that has developed a mobile app for consumers to buy and sell things, seems to be well on its way there.
The startup has raised a series A round worth US$6 million led by prominent venture capital firm Sequoia Capital. Existing investors Rakuten Ventures, Golden Gate Ventures, 500 Startups, and serial entrepreneur Darius Cheung also joined.
The investment will be used for expansion into Malaysia, Indonesia, and Taiwan. Product development will get a boost, with the goal of enhancing the chat feature, improving search, and adding more ways to verify user identity. Payment integration is further down the roadmap.
Since launching in 2012, the peer-to-peer marketplace has listed eight million new and second-hand products in categories like fashion, beauty, furniture, and baby items. Over two million items have been sold on the app – that’s eight transactions a minute. According to the press release, the average active Carousell user spends about 21 minutes a day browsing the app, which is comparable to Instagram.
The startup says its growth has been organic, with “practically no marketing” spent to make it a top app of its kind in the region. Its “core metrics” have doubled every three to four months. Carousell is currently chasing user growth, and as such has no fixed timeline to pursue monetization. Nonetheless, it plans to eventually make money through features that help sellers, such as premium listings and tools to make selling more efficient.
Money from the Sequoia Capital India IV fund, totaling US$530 million raised in April 2014, was used in this investment.
About a year ago, the company raised a US$800,000 seed round led by Japanese ecommerce giant Rakuten. Before that, it got some seed funding from government grants, QuestVC, and NUS Enterprise. It is one of a handful of startups that turned from a hackathon idea into a full-fledged startup.
The team is preoccupied with regional expansion lately, and its Taiwanese expansion is striking. “We would eventually like to get to Thailand or Philippines, but with finite resources, we decided to prioritize on markets that are more proximate to Singapore culturally and infrastructurally,” Quek Siu Rui, founder and CEO of Carousell, tells Tech in Asia. Taiwan was chosen due to a “relatively sophisticated ecommerce market” where consumers frequently buy and sell online. In addition, Taiwan lacks a clear mobile commerce leader.
The same may be said for the rest of Asia, where web classifieds are still dominant. ShopSpot and Duriana are some of the startups that are gunning for the mobile marketplace niche, but neither appear to have reached Carousell’s popularity. With this latest funding round and the pull of network effects settling in, it’s unlikely they’ll catch up.