Carousell, Singapore’s startup darling, has found its path. In November, the seven-year-old mobile classifieds service announced a merger deal with Telenor-owned rival, 701Search. The deal values the combined entity at $850 million and brings together two of the region’s most prominent classifieds businesses.

The Singapore-based company was “unbelievably lucky” to pick up this deal, an investor whose portfolio includes classifieds businesses told The Ken. This turns the business into a genuine contender for unicorn status (a valuation north of $1 billion), said the investor.

The Carousell story is well known in Southeast Asia startup folklore. It was founded by three early-twenties graduates of the National University of Singapore (NUS) after they spent a year in Silicon Valley as part of their undergraduate program.

The company only began to monetise its service in the past few years, adopting a classic classifieds approach by charging for advertising and visibility with a focus on high-priced assets. Profitability, however, remained a distant dream. Not anymore. 701Search is a company even rarer than a unicorn—it’s a profitable business. The combination of Carousell’s reach and 701Search’s profitability is seen as a perfect match.

For Carousell, the deal is a vindication of its perseverance. Southeast Asia is a region where major startup exits remain rare despite increased firepower from investors (a topic that The Ken recently explored in depth), but Carousell has had its past temptations. Its three young leaders once rejected a $100 million acquisition offer that Bloomberg reported would have made CEO Siu Rui Quek (and co-founders Marcus Tan and Lucas Ngoo) “wealthy beyond his dreams.”

Not only did Carousell choose to stay the course, but it also earned major validation this past April when it closed a $56 million investment from OLX, the classifieds business belonging to Naspers. South Africa-based conglomerate Naspers is best known for an early and lucrative investment in Chinese internet giant Tencent.

One industry source said at the time that the deal could be a precursor to an eventual takeover from OLX, a process that’s fairly common for the group. Carousell’s tie-in with 701Search furthers that thinking—it is precisely the kind of regional consolidation one would expect of a company on its way to becoming a must-buy business for a major global player like OLX.

But success is not a guarantee. Both Carousell and 701Search’s assets will continue to live on independently post the deal. The challenge for Carousell will be in how it allows each service to grow while replicating success across its portfolio. There may be opportunities to lower operational costs. The investor quoted earlier said retaining the “undoubted” talent of 701Search staff will be critical—this is truly an operational challenge.

Easy Carou-Sell

Carousell has raised over $180M from marquee investors such as DBS, Southeast Asia’s largest bank; Japanese e-commerce titan Rakuten; global VC giant Sequoia Capital; and EDBI, the corporate investment arm of Singapore’s Economic Development Board.

AUTHOR

Jon Russell

Jon Russell is Southeast Asia editor for The Ken based in Bangkok. Originally from the UK, Jon moved to Thailand in 2008. He’s passionate about telling thoughtful business stories, and tracking the impact of the internet in his adopted home of Southeast Asia.

View Full Profile

Read this story. Subscribe Now

This story is available across both editions. Subscribe to the one that’s most relevant for you. Questions?

Pick an edition

MOST POPULAR

Annual Subscription

12-month access to 200+ stories, archive of 800+ stories from our India edition. Plus our premium newsletters, Beyond The First Order and The Nutgraf worth Rs. 99/month or $2/month each for free.

Rs. 2,750

Subscribe
 

Quarterly Subscription

3-month access to 60+ new stories with 3-months worth of archives from our India edition. Plus our premium newsletters, Beyond The First Order and The Nutgraf worth Rs. 99/month or $2/month each for free.

Rs. 1,750

Subscribe
 

Single Story

Instant access to this story for a year along with comment privileges.

Rs. 500

Subscribe
MOST POPULAR

Annual Subscription

12-month access to 150+ stories from Southeast Asia.

$ 120

Subscribe
 

Quarterly Subscription

3-month access to 35+ stories from Southeast Asia.

$ 50

Subscribe
 

Single Story

Instant access to this story for a year along with comment privileges.

$ 20

Subscribe

Questions?

What is The Ken?

The Ken is a subscription-only business journalism website and app that provides coverage across two editions - India and Southeast Asia.

What kind of stories do you write?

We publish sharp, original and reported stories on technology, business and healthcare. Our stories are forward-looking, analytical and directional — supported by data, visualisations and infographics.

We use language and narrative that is accessible to even lay readers. And we optimise for quality over quantity, every single time.

What do I get if I subscribe?

For subscribers of the India edition, we publish a new story every weekday, a premium daily newsletter, Beyond The First Order and a weekly newsletter - The Nutgraf.

For subscribers of the Southeast Asia edition, we publish a new story three days a week and a weekly newsletter, Strait Up.

The annual subscription will get you complete, exclusive access to our archive of previously published stories for your edition, along with access to our subscriber-only mobile apps, our premium comment sections, our newsletter archives and several other gifts and benefits.

Do I need to pay separately for your premium newsletters?

Nope. Paid, premium subscribers of The Ken get our newsletters delivered for free.

Does a subscription to the India edition grant me access to Southeast Asia stories? Or vice-versa?

Afraid not. Each edition is separate with its own subscription plan. The India edition publishes stories focused on India. The Southeast Asia edition is focused on Southeast Asia. We may occasionally cross-publish stories from one edition to the other.

Do you offer an all-access joint subscription for both editions?

Not yet. If you’d like to access both editions, you’ll have to purchase two subscriptions separately - one for India and the other for Southeast Asia.

Do you offer any discounts?

No. We have a zero discounts policy.

Is there a free trial I can opt for?

We don’t offer any trials, but you can sign up for a free account which will give you access to the weekly free story, our archive of free stories and summaries of the paid stories. You can stay on the free account as long as you’d like.

Do you offer refunds?

We allow you to sample our journalism for free before signing up, and after you do, we stand by its quality. But we do not offer refunds.

I am facing some trouble purchasing a subscription. What can I do?

Please write to us at [email protected] detailing the error or queries.