Carousell Group to reportedly go public via SPAC merger

Southeast Asian classified business Carousell Group will reportedly go public through a merger with special purpose acquisition company (SPAC) L Catterton Asia. According to multiple sources such as Bloomberg and The Business Times (BT), Carousell has entered into exclusive talks with the SPAC. This comes after Bloombergreported in June last year that Carousell was mulling a US listing via a merger with a blank-check firm and the potential transaction could reportedly value the company as much as US$1.5 billion.

Both Bloomberg and BT also reported that the SPAC plans to carry out due diligence on Carousell over the coming weeks with the goal of reaching a merger agreement as early as this quarter. The deal may include a private investment in public equity worth a few hundred million dollars, the media outlets reported. However, there is no certainty that the talks will result in a deal, and details such as timing and valuation could change. 

Based in Singapore, L Catterton Asia is a wholly-owned fund platform of L Catterton, with a presence in other markets such as Hong Kong, Mumbai, Shanghai, Sydney and Tokyo. Led by managing partners Chinta Bhagat and Scott Chen, the SPAC had raised US$250 million last year to target a combination with companies in the high-growth, consumer technology sectors across Asia, according to BT. 

Carousell Group was founded in 2012 and currently serves a community of tens of millions of users across eight markets in Southeast Asia under the brands Carousell, Mudah.my, Cho Tot and OneKyat. According to Carousell, its mobile-first approach reignited the classifieds space, making selling and buying easier. 

In September last year, Carousell Group secured an investment of US$100 million, bringing its valuation to US$1.1 billion. The funding, led by Korean private equity STIC Investments, aimed to accelerate the company's leadership in the region, and enable Carousell to achieve its goal of redefining commerce for secondhand goods and automobiles in an increasingly digitally savvy, affluent and sustainability-conscious region. According to CNBC, other backers for Carousell included Golden Gate Ventures, Naver and Sequoia Capital India.

Carousell is not the first company to go public via a SPAC merger. Last year, Grab and Altimeter also entered into a SPAC deal and this eventually saw the company open at US$13.06 last December on Nasdaq, before falling to US$8.61 on the first day. Grab had first announced its merger with Altimeter Growth Corp in April, raising about US$4.5 billion in cash and valuing Grab’s shares at US$39.6 billion.

The year 2021 also saw PropertyGuru merging with SPAC Bridgetown 2 Holdings, to go public on the New York Stock Exchange. The combined company will have an enterprise value of about US$1.35 billion and an equity value of approximately US$1.78 billion at closing.

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