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Used-car trading platform Carma has made a subdued debut on the ASX after raising $100 million in an IPO as the shares traded up to a 10 per cent discount to their $2.70 issue price this morning.
The proceeds of the IPO, which valued the group at $270 million, will be used by Carma to drive its growth strategy including expanding buying from consumers through Sell-to Carma, scaling reconditioning operations and growing selection through increased vehicle inventory.
The Sydney-based Carma was founded in 2021 by Lachlan Macgregor and Yosuke Hall to address the challenges of buying and selling used cars which the company describes as "a high-stakes transaction for most people".
Carma is described as a technology-led, full-stack digital platform that integrates sourcing, inspection, reconditioning, pricing, online retail, wholesale auctions, financing and delivery to provide a “simpler, trusted experience for buyers and sellers”.
The platform provides Australian car owners with a consumer marketplace to find, buy, finance and trade-in a used car and have it delivered without leaving home.
The Sell-to Carma platform is also said to offer a fast seamless experience allowing anyone to sell any used car to Carma at a “fair price”, while the company also has a dealer-only channel that allows Carma to sell inventory that doesn’t fit its consumer marketplace.
Carma also undertakes vehicle inspection and reconditioning in-house at its purpose-built facilities in Sydney.
This is described as a core part of the company’s vertically integrated model to ensure that every vehicle sold through the consumer marketplace meets Carma’s quality standards.
With more than 3.5 million used cars sold annually, Carma is seeking to disrupt the $118 billion Australian pre-owned car industry which the company says has been plagued with outdated processes and inconsistent standards.
“We founded Carma in 2021 because we, like so many others, had personally experienced the challenges associated with buying and selling pre-owned cars,” says Lachlan MacGregor, the CEO of Carma.
“Even if you’re able to determine if a car is in good condition, it’s a high-stakes transaction for most people that can involve large amounts of money, finance and trade-ins.
“We knew that there had to be a better way, and today we’re delighted to invite the public to join us as we accelerate the transition of Australia’s automotive retail industry.”
The Carma prospectus notes that over the four years since inception, the company has witnessed a “positive impact” on thousands of Australians who have used the platform.
“We’ve had customers take delivery of their purchased car on the same day after finding it on Carma or get paid with funds in their account within hours of enquiring about selling their car to us,” says the company in the prospectus.
Carma says it is also focused on leveraging technology “in ways that haven’t been done before”.
“Automotive is an incredibly data rich industry but that data has been difficult for industry participants to harness,” says the company.
“At Carma, we’ve built strong foundations through our AI driven machine learning pricing models which are able to accurately and fairly price vehicles of any make and model.”
Carma delivered pro-forma revenue of $71.4 million in FY25, although EBITDA fell into the red to the tune of $27.8 million, taking the after-tax loss to $34.9 million.
The company is forecasting FY26 revenue to hit $127.6 million with the EBITDA loss still expected to come in at $27.7 million.
The Carma founders point out that the business is in its early days of development, with the ASX listing providing Carma with access to capital markets, the capacity to boost the brand's profile and to provide management with greater flexibility to execute growth initiatives.
“Today marks a pivotal milestone for Carma,” says Carma chairman Owen Wilson following the ASX trading debut.
“This IPO will help provide the capital needed to fundamentally transform the pre-owned car experience for Australians, where buyers can find and purchase a high quality vehicle without ever leaving their home, and sellers get a seamless experience at a fair price.
“I believe Carma is uniquely positioned to lead the digital transformation of the Australian automotive retail industry, and we look forward to welcoming future investors on this journey.”
Carma shares were trading at $2.49 each at 12.11pm (AEDT), down 21c from their issue price.
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