The SOCAR top management team with CEO Leon Foong (extreme left)
Early this month, Malaysian car-sharing platform SOCAR announced a US$55 million Series B fundraise from South Korean VC EastBridge Partners and Malaysian multinational Sime Darby. The fund is intended at introducing clean mobility initiatives and further developing its people-to-people car sharing marketplace TREVO.
According to SOCAR, it has 2,200 cars on its platform in 36 different models in over 1,000 locations in Selangor, Kuala Lumpur, Penang, Johor, Ipoh and Melaka. It currently has close to 6,400 car listings in major cities in Malaysia and Indonesia onboard its TREVO platform. The company has some grant plans to capture Southeast Asia’s sizzling car-sharing market.
e27 spoke to its CEO Leon Foong to know SOCAR’s products, plans, and its new initiatives in the pipeline.
Edited excerpts:
SOCAR has just raised US$55M in new funding. Why does the company need such a massive amount of investment?
We will use the Series B funding to expand our multiflex mobility footprint in Southeast Asia. We want to grow our Malaysian and Indonesian businesses and launch in at least one new country in the next 12 to 24 months.
The investment will also be channelled towards continuous technological enhancements, investing in further trust and safety measures.
We will also be using our fleet expertise to introduce clean mobility to the masses. We will be leveraging our peer-to-peer marketplace expertise to further empower fleet and private car communities across Southeast Asia via the TREVO platform.
Once we achieve our targeted liquidity level for our platform, we can then work with partners to offer users other ancillary services that car owners and drivers need, such as insurance coverage.
Could you share more details about TREVO?
TREVO is a people-to-people car sharing marketplace that enables drivers (guests) to book any car that fits their needs and wants from car owners (hosts) in the TREVO community. One of the key goals of this business model is to add value to the multiflex ecosystem by empowering a new segment of users to earn money from sharing their cars when they are not using them. In the process, we aim to alleviate the financial burden of servicing hefty monthly auto loan instalments.
Also Read: SOCAR raises US$55M in Series B funding round from new investors EastBridge Partners, Sime Darby
Across Southeast Asia, we are currently seeing a huge trend in terms of a “consumption upgrade”, people wanting to upgrade from 2-wheelers to 4-wheelers as a status symbol. This leads to an increase in demand for people to access cars to transport their families around and also leads to an increase in personal car ownership and thus underutilised personal cars.
Ultimately, TREVO is about driving people forward towards achieving their financial and lifestyle goals. We saw that the sharing economy has been embraced in Malaysia as a new business model during the last three years and wanted to seize this opportunity especially when there are so many underutilised vehicles in Malaysia.
What is your synergy with EastBridge and Sime Darby? Is Sime Darby’s a strategic investment?
EastBridge’s investment in us aligns with its Korea+ core investment strategy that leverages EastBridge’s Korea and pan-Asia network, whereby investments are focused on companies with solid fundamentals, high growth potential and global expansion prospects.
As for Sime Darby (a global trading and logistics player), we see them as a strategic partner in the mobility ecosystem. In the future, we aim to further our collaboration in new/used car sales, aftersales, fleet management, logistics and finance/insurance.
We will build on our existing partnership with Sime Darby’s motors division. Aside from the funding, we also have the ‘Fund Your Drive’ programme that seeks to make car ownership more affordable and accessible. The programme offers a guaranteed resale price at the end of a 12-month period for buyers of Sime Darby Auto Selection cars and guaranteed minimum income from car-sharing on TREVO when the car owners use the platform to generate income from their vehicles.
What are the five key things that you did right to win the hearts of the consumers in Malaysia?
I am passionate about the industry and growing the mobility ecosystem in Malaysia. From my personal experience in the mobility space, I’ve learned that mobility is hyperlocal.
For example, in Indonesia, Gojek is one of the local giants, and it has adopted the hyperlocal strategy well, so never underestimate the importance of localised features.
Hyperlocalisation in terms of products and service offerings can push consumers to continue using the product or service. This is something that I’ve learned. We will continue to apply this for SOCAR and TREVO within Southeast Asia. In any market we are in, we love to partner with the local conglomerates and strategic partners.
Understanding the local environment is critical. Hot sunny days, coupled with frequent showers and high humidity, means that Malaysian drivers and car-sharing users might not want to walk long distances as part of their journey. With that in mind, we launched SOCAR-2-U, where you can get a car delivered right to your doorstep and have it picked up after.
The “pre-paid” mindset. Unlike most developed countries where consumers have established credit scores and prefer post-paid accounts, Malaysia is still predominantly a pre-paid country. With that in mind, we were clear on rolling out upfront pricing where our members would know what they are paying upfront for the service chosen.
Flexibility. We allow members to extend reservations while the reservation is live, in small increments such as 10 minutes.
Not all cities are built equal. We approach Penang differently from the way we operate our SOCAR and TREVO business in the Klang Valley. Penang is an island, and the majority of longer-distance trips would involve crossing the bridge.
With that in mind, we could offer new product offerings, such as floating car-sharing bookings within Penang Island. Here, SOCAR members could pick up the car from any public parking space and drop it off at any other Penang Island City Council (MBPP) parking lot.
Also Read: South Korea’s car-sharing startup SoCar drives into Malaysia
One of our popular product offerings within the Klang Valley is our ‘one-way’ airport booking (especially pre-lockdown), where people could pick up the car from anywhere and drive to the airport and end their booking there.
Hire people who care and understand the market. I’m lucky to have a team who not only believes in building up a solid multi-flex car-sharing community but are also part of the community themselves. When you use the product regularly, you naturally see the gaps that can make the experience better. You are constantly seeking to build a better product, as you as a consumer will also benefit. We acknowledge that we are far from perfect, but we strive to use this investment to improve the areas we’ve highlighted as crucial areas for making car-sharing more seamless.
Car-sharing is a highly capital-intensive business. How do you manage to run it without bleeding much? Do you own the fleet?
In the last couple of years, residents of the Klang Valley have enjoyed greater access to public transit, with more MRT and LRT stations opening. However, much of the country is still dependent on private vehicles to move around.
For areas that do not have the best accessibility via public transport, we see a business model like ours filling the gaps between the limitations of public transport and the choice of not owning private vehicles.
We strive to complement the existing public transportation sector by providing more options with our fleet of cars for travel needs. Moving forward, we foresee the dependence on private cars and motorbikes decreasing, as those who would like to enjoy the benefits of utilising a car without owning one will have a greater array of choices, such as opting for a SOCAR or TREVO vehicle.
For SOCAR, we own the fleet. Currently, we have 2,200 cars in 36 different models in over 1,000 locations in Selangor, Kuala Lumpur, Penang, Johor, Ipoh, Melaka and Seremban on our SOCAR app.
Meanwhile, for TREVO, we have car owners and car rental companies listing their cars on our platform. TREVO currently has close to 10,000 car listings in major cities on its app-based P2P car-sharing marketplace in Malaysia and Indonesia.
What opportunities do you see in the market? What has been the impact of COVID-19 on your business?
Due to the pandemic, those who do not own cars may be concerned about being near other commuters in crowded public transportation daily and perhaps worry about touching surfaces in crowded public areas, thus exposing themselves and their family to possible infection. SOCAR is an option for them to have a private vehicle for commuting or longer trips temporarily.
Given the current unemployment rate resulting from the pandemic, some Malaysians planning to buy a car may have to shelve their plans due to income uncertainty.
Here, the sharing economy is primed to fill the gap, whether by temporarily offering access to private cars through car-sharing services like SOCAR or a P2P car sharing marketplace like TREVO. It also empowers Malaysians to defray the cost of car ownership by earning income as a TREVO Host.
SOCAR CEO Leon Foong
Malaysians who own underutilised cars sitting in parking lots and outside homes across the nation — including those who are doing less commuting after opting to work from home in the ‘new normal’ — can also take advantage of the P2P car-sharing model to earn extra income.
Logistics for SMEs has also seen a solid shift to e-commerce and contactless deliveries. In response to the needs of businesses suffering from a surge in third-party delivery costs or could not quickly scale up their delivery services, we launched the SOCAR Business Mobility plan during the first MCO.
As the economy reopens and interstate travel resumes, we will see a massive rebound in domestic tourism coupled with an increase in demand for land transport. More people will want to drive to a destination of their choice and enjoy the freedom of having their own vehicle for the journey. SOCAR and TREVO will be primed to serve this increase in demand.
If the numbers in the US are any indicator, we are preparing ourselves for a rapid spike in demand. We are currently working on building up a reliable supply base when both Malaysia and Indonesia reopen for interstate travel.
What are your expansion plans? Do you plan to take the business out of Malaysia to Singapore/Korea?
In late 2020, we introduced TREVO to the Indonesian market for several reasons, such as the emergence of Indonesia’s middle-income class and the government’s initiatives to reduce carbon emissions over the next ten years. Due to this, we foresee that the adoption of car-sharing will continuously grow in the Indonesian market.
As mentioned earlier, we want to grow our Malaysian and Indonesian businesses and start business operations in at least one new country in the next 12 to 24 months.
Also, we hope to expand our service offerings to more cities and states in Malaysia to make vehicles more accessible to all to complement the mobility ecosystem.
Any country that has underutilised vehicles will be a market that we will be interested in expanding to. We hate to see cars lying around in parking lots not being used. Our technology is built to facilitate car-sharing to ensure that the owners of these underutilised assets can make more money by fulfilling a renter’s wish to drive a car that they might otherwise not have access to.
Who are the other major car-sharing companies in Malaysia? How tough is the competition?
There are a few major car-sharing companies in Malaysia, but our competitive edge against other industry players is our variety, accessibility, affordability, and convenience compared to other industry players. We are also the only full-stack player that offers both B2C keyless car-sharing with our owned assets as well as peer-to-peer car-sharing.
With SOCAR, we offer our users the option of 36 different car models ranging from hatchbacks to SUVs at an affordable price. We are also more accessible than others because of our presence in more than 1,000 zones across Selangor, Kuala Lumpur, Penang, Johor, Ipoh, Melaka and Seremban. We are more convenient because bookings can be completed in just a couple of taps via our app. At the same time, our SOCAR-2-YOU door-to-door car delivery service – which we are continuously expanding, further increases access to our vehicles.
EVs are gaining momentum the world over, including SEA. What are your plans to tap into this opportunity?
We are looking to speed up the adoption of EVs in Malaysia. At SOCAR, we aim to expand our fleet in Malaysia by up to hundreds of EVs in the next two to three years. This includes rolling out up to 50 EV zones in Malaysia by the end of 2022.
To accelerate EV adoption in Malaysia, we recently signed an MoU with Tenaga Nasional Berhad (TNB), the largest electricity utility in Malaysia. The MoU outlines TNB’s plans to leverage SOCAR’s data on vehicle usage and travel behaviour to identify strategic locations along key travel routes for the installation of EV charging infrastructure. The demand data shared would determine the location, number and type of chargers for installation, including direct current (DC) fast chargers.
As a mobility provider, we are committed to driving the adoption of sustainable mobility. Car-sharing is already playing a fundamental role in taking cars off the road as one car is shared between multiple users on a monthly basis.
To take a step further, we want to use our platform and resources to enable our community of drivers to experience the benefits of driving an EV, showing them how fun and convenient it is to adopt the EV lifestyle where tailpipe carbon emissions become a thing of the past.
What are your future plans?
Moving forward, we want to continue maintaining close contact with the government and stakeholders to enable more Malaysians to embrace the idea of going carless and help more individuals from the B40 segment to benefit from our service offerings. We are confident that our business will bounce back in due time, as we offer added value to the multiflex community.
We also target to continue growing and strengthening SOCAR’s foothold in Malaysia, especially with the new offerings in the pipeline. With the upcoming offerings, we expect to see more Malaysians enjoying seamless multiflex mobility.
Lastly, given the growth that we have had in Indonesia, we need to start building more car-sharing communities across Southeast Asia. Personal mobility should not be restricted to those who can afford a car or get a loan. We believe that our peer-to-peer TREVO model will play a huge role in allowing more people in South East Asia to drive a car of their own choice without owning one.
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Image Credit: SOCAR
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