Founded in 2012, online trading marketplace app Carousell is one of Singapore's hottest, most promising start-ups. Currently operating in 14 cities across Asia, including Kuala Lumpur, Jakarta, Taipei, Hong Kong and Manila, the 'Classifieds 3.0' business is set to undergo nitro-charged expansion, having secured US$35 million in series B funding this August in a round led by Rakuten Ventures, with contributions from major players 500 Startups, Sequoia India, and Golden Gate Ventures (the leading Singapore / San Fran early-stage VC fund that's been behind Carousell since its inception).
Carousell's founders are three young Singaporean entrepreneurs, Marcus Tan (President), Siu Rui Quek (CEO) and Lucas Ngoo (CTO). Here, Tan talks about the trio's inspirations for building the app, their scrappy DIY early days, the challenges of rolling out across Asia, securing funding, and overcoming 'kaisu' to innovate fearlessly.
Carousell was far from an overnight success, we took close to two years to get to where we are today. There were sacrifices of course, going 18 months on no salary, living off our savings. It really helped that we lived with our parents. We had a nice spike when we launched, some good coverage and were number two in the Lifestyle category in the App Store, but after that it just crashed, the next six months there was some usage but it wasn't growing.
We learnt a lot, spoke to a lot of sellers and reacted to the pain points they were telling us about, the difficulties they were having with the various online selling platforms they were using. All those old platforms like Gumtree and Craig's List, they're really laborious - we wanted to create something where selling was as simple as snapping a photo. And where, as long as you know how to send a text message, you know how to buy.
We got a lot of feedback from the community over that first year and a half and iterated constantly - you can make changes really easily on the fly nowadays. We wanted to create a little prototype and validate it - Singapore is a really good size to do controlled group testing, validating - and when we saw it worked, saw the stories of people who'd used and loved the product, how it created a community, that inspired us to pursue it full-time.
Our focus has always been on the social impact we were creating, but the business side makes that sustainable.
NO PROBLEM? NO IDEA.
The thing about entrepreneurship is, you don't have to be a super expert in something to begin with, you just have to be good enough to be dangerous, to be able to solve a problem, validate, quickly get something out - and after that you can find people who are really great to build up the platform.
But the first stage is just validating the problem you're solving. Which is what we did the first one and a half years, just the three of us. The business side, you don't really need it early on - just focus on the product. If you don't really solve a problem, no amount of sales and marketing will get you anywhere.
We spent a year in Silicon Valley, my two partners and I, as part of NUS's programme to send students there to work and take classes at Stanford - that's where we fell in love with tech. I was a business school student, and at the time I wanted to be in consulting, finance. But when we went over there, our lives changed.
When you see how people are so passionate about tech, how it has the potential to solve big, scalable problems - that was so inspiring. We never wanted to build a big company, we just saw the potential in this technology.
In Silicon Valley, you'd look around, see people sitting in coffeeshops coding, designing stuff; cofounders first meeting one another by chance in coffeeshops - Instagram being a good example. So when we came back, we thought, what problem do we want to solve? And because we all did a lot of online trading, we just wanted to build something to use ourselves, something that'd solve the problems we had in online trading.
All the fundraising we've had was unintentional. We just wanted to get feedback from investors. Our first mentor was Vinnie Lauria (managing partner at Golden Gate Ventures), he mentored us for two months, it was part of the school's arrangement - that's the beauty about Singapore, NUS, they have a lot of those type of arrangements, they matchmade us with Vinnie.
He had just arrived from Silicon Valley and was trying to plug into the ecosystem, and he was awesome, worked with us for several months, figuring out why we weren't growing, he'd check in regularly, check on our metrics and growth, he helped us reprioritise our road map.
We really benefitted from the product thinking he had - he wasn't an investor yet, but he wanted to help us, and we wanted to learn. We were like sponges, soaking up as much as possible. And over time we started to grow.
Vinnie saw the progression we had, being able to change, iterate, be lean, testing new things. We started seeing traction, and he offered us a term sheet.
Then he connected us with other investors, introduced us to a network, we met a few VCs, and then Rakuten suggested they lead the round, we got connected to other seed investors, 500 Startups, we put together a seed round quickly, closed it and moved on. With capital, we were able to expand across the region.
Our ambition was always to build technology to serve the world, and we had to have capital to do that. We started testing in Malaysia, Indonesia, and raised more capital from Sequoia - we'd connected with them during the seed round, but at that point, it was too early for them.
Subsequently, we met over coffee, within 10 minutes they got inspired by our vision, and they were like, 'Let's do it.' It was all very unintentional. It's like dating. VCs want to get to know you, how you work, your mission - they don't invest straight away.
Most of Southeast Asia is emerging - Singapore isn't a good representation of ASEAN / Southeast Asia. Singapore's a good ground to test ideas, and to get resources, but it's very different to Malaysia or Indonesia. They're quite fragmented, not homogenous like Singapore.
And while their populations are very large, smartphone penetration and GDP aren't as high as Singapore, and you have to take that into account looking at the addressable market.
But it will grow in the next five to 10 years and that's why at Carousell we're investing in targeting the early-adopters in those countries.
FAIL = FIRST ATTEMPT IN LEARNING
Attending classes at Stanford was an eye opener - compared to the way seminars are conducted in Singapore, in America, they question a lot of things. There's no right or wrong way to learn, but in terms of culture, it'll help to encourage people here to try new things, make mistakes.
But I see more and more people taking risks in Singapore these days, looking at the way things are currently done and making a bet that there's a better way to do things.
You'll make mistakes along the way, but that has to be positioned not as failure, just trying new things, prototyping, innovating. We need innovation.
This article was published in BLLNR.