One — a financial management operating software for businesses, the other — an end-to-end online retail platform for used cars. Both recently ranked in the top 30 of The Straits Times and Statista’s annual list of Singapore’s Fastest Growing Companies, and not for the first time. This year’s list ranks 100 companies based on the firm’s revenue growth between 2019 and 2022.
In today’s market where fast growth is more costly than it used to be for venture-backed startups, how did they navigate capital efficiency and become fast growth companies while also achieving profitability in last 2-3 years?
Fast growth from differentiated company DNA
While both companies were relatively early players, they entered their industries a little differently from their peers. Aspire went into credit vs payments. Carro started as a marketplace *with* an understanding of the need to acquire supply for better quality data). These differentiated go-to-market strategies seeped into the DNA of their companies, one enabling business growth through software and the other putting data to work to redefine the user car industry.
As CEO and co-founder Andrea Baronchelli shared on our podcast back in 2020: “Typically, there’s a lot of payments-led fintechs, right? But if you talk to them, they will pretty much always tell you that [they are] trying to monetize via credit. Either they have it in the plans or they’re testing it out, or they are doing a bit on the side just to add some revenues on the topline, but it’s pretty clear in the industry, that’s one fundamental way where eventually the path to profitability needs to come from.”
Carro CEO and co-founder Aaron Tan shared on our podcast back in 2023: “So when we started this business, we thought of this as like a Carfax / KBB business. In fact, we have owned this domain called graph.co for the longest period of time. And we wanted to just try to understand the pricing of vehicles, the condition of vehicles, et cetera. But we just couldn’t get it done because at that point in time when we started…we didn’t have the data. Not only do we not have the data, we didn’t have data that was considered editorial grade…So we scrapped the plan of starting off with a data approach first, and we started off by selling the cars first, and embedding this within the banks. So today, most of the banks have an MOU with us to find out the pricing on vehicles. And that sets up the benchmarks for this…How do we put data to work? That’s high-level what we do at Carro.”
Fast growth from data to grow beyond market share acquisition
Speed in acquiring market share is not just about acquiring users, or even users’ share of wallet. Fast growth companies recognize the importance of building out data flywheel as they build out their customer base. The former speeds up the ability of the company to not just acquire market share but expand what the total market opportunity means for the company.
For Carro this was best reflected in two ways: the development of their financial services arm, Genie Finance, from early in 2016-2017, where data was put to work underwriting auto financing and insurance, and the development of their data science function, topped off by hiring a Chief Science Officer.
For Aspire, the former tapped into non-conventional data (e.g. real-time business transactions, online ratings, and social activities) for new-age SME credit scoring that was the bread-and-butter for a self-evolving and scalable credit service (i.e. an early version of channel finance).
Fast growth from developing expertise after the sale
Both companies built up strengths in aftersales and customer service early on. Apart from their marketplace and financing business, Carro had separate business unit dedicated to this, hiring top technicians and leveraging technologies like machine learning and AI to support (Carro’s 100-point check). More recently they have invested more into this business, developing Carro Care in Malaysia through a strategic partnership with Jardines Cycle & Carriage.
On the other hand, Aspire had developed a brand around its business community and ecosystem initiatives, among many others that were organically grown. They have also made it a point to tap into partnerships with various business service providers like Visa and Wise over the years to improve customer experience on their platform (as opposed to building out these services themselves).
Fast growth from an ecosystem to accelerate expansion across market segments and geographies
While there are many benefits to building out an ecosystem when done well (and we document key elements of the ecosystem approach here), with respect to fast growth, the ecosystem approach provides optionality and flexibility for market and geographic expansion.
For Aspire for example, their ecosystem approach has allowed them to grow with their initial SME customers and also win over larger scale businesses.
Aspire Singapore General Manager Thomas Jeng shared on our podcast, “On the Aspire side, as you try to scale across different units or across different countries, you can take the same platform and issue corporate cards, issue budgets to different people ensuring visibility as well as control throughout your scaling process. It tends to be easier than trying to replicate things through spreadsheets or through Google Docs throughout each different country. We’ve had several successful case studies…[used] in their operations throughout the region, saving a lot of time on manual work and making sure that their teams are well trained on budgets, leading to greater fiscal responsibility, even while empowering the spend more quickly…the overall gist of things is wherever it makes sense, do try to use a unified platform as possible.”
For Carro, their ecosystem approach has allowed them more easily take diverse go-to-market strategies in their market expansion, for example starting out with rentals in Taiwan or entering a joint venture with Softbank in Japan.
Fast growth from a focus on healthy unit economics and profitability from day one
The previous approaches discussed (go-to-market, ecosystem approach, aftersales investment, etc.) also allowed these companies to quickly improve margins over time and eventually reach company profitability. Speed is important, especially in an increasingly competitive landscape, as both industries became over the years. But it is not the only aspect of growth.
Beyond these various strategies and approaches, it has been fundamental for both companies to have built out teams and hired talent focused on execution and ensuring that growth would be sustainable.
As Carro CFO Ernest Chew shares on our podcast in 2023: “We reported record profits last quarter reported record EBITDA, which was 3x the entire full year last year. We are well on track to achieve more than 10x full year EBITDA compared to our entire last financial year. On top of that, we grew our gross profit margins; we pretty much doubled that to close to mid teens.
We achieved positive operating profits and even positive adjusted net profits. We were well ahead of in terms of meeting our profit targets…We are amongst the first to pivot towards optimizing to achieve positive EBITDA and profitability, whilst maintaining strong, reasonable revenue growth.”
Paulo Joquiño is a writer and content producer for tech companies, and co-author of the book Navigating ASEANnovation. He is currently Editor of Insignia Business Review, the official publication of Insignia Ventures Partners, and senior content strategist for the venture capital firm, where he started right after graduation. As a university student, he took up multiple work opportunities in content and marketing for startups in Asia. These included interning as an associate at G3 Partners, a Seoul-based marketing agency for tech startups, running tech community engagements at coworking space and business community, ASPACE Philippines, and interning at workspace marketplace FlySpaces. He graduated with a BS Management Engineering at Ateneo de Manila University in 2019.