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Carousell to merge with 701Search as it expands in Southeast Asia

Carousell's payment system, CarouPay. (PHOTO: Carousell website)

SINGAPORE — Carousell has signed an agreement with Telenor Group to merge with 701Search, as it seeks to be the leading online classifieds marketplace platform in Southeast Asia.

Following the merger, the Singapore-based startup will be valued at more than US$850 million (S$1.16 billion), according to a statement on Thursday (21 November). The company was valued at more than US$550 million in April.

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

The 701Search’s regional hub team that operates in Singapore will be fully integrated into Carousell. The businesses will report to Carousell co-founder and chief executive officer Quek Siu Rui.

Carousell said in its statement that Norwegian telecommunications company Telenor will own 32 per cent of the combined company, making it the single largest minority shareholder.

The merger comes seven months after Nasper’s OLX Group took a 10 per cent stake in Carousell, in a transaction worth S$56 million. As part of the deal, Carousell will acquire OLX Philippines.

The company is well-positioned to advance the combined business to the next level with annualised revenues of over US$40 million, a business of over 80 per cent gross margin and two profitable markets, Rakesh Malani, chief financial officer at Carousell said.

“Our mission has remained the same since day one. We want to inspire every person in the world to start selling and buying,” Quek said.

“Merging with 701Search will allow us to further this mission on an even greater scale and fortify our leadership in Southeast Asia.”

Carousell, founded in Singapore in August 2012 by Quek, Marcus Tan and Lucas Ngoo, now operates in eight markets across Asia with over 250 million listings. It is backed by Telenor, Rakuten Ventures, Sequoia India, 500 Startups, Golden Gate Ventures, DBS and EDBI. 

“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.”