Picking A Lane: Car Platform Carma’s ASX Listing

This story features CARMA LIMITED, and other companies.
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• Used car enterprise Carma listed earlier this month, raising $100 million via its IPO
• Carma’s platform seeks to deliver a smooth and elegant experience to used car traders
• Data suggest the used car sector is a buyer’s market, but it has a complicated future

By Ed Kennedy

Used car enterprise Carma’s ((CMA)) ASX listing occurred earlier this month, following its founding in 2021.

In listing, it travels down a road where the tremendous success of Car Group (owner of carsales.com.au) ((CAR)) can at once serve as a source of inspiration, and intimidation. 

Just as the models of these respective businesses differ in various ways, the story of Car Group is indeed remarkable, but not one that should be seen as easy to replicate.

In turn, the pandemic’s impact on the used car sector this decade, and the presence of other online giants from outside the auto world, affirm it’s today a highly complex and congested space. 

So, what’s the state of the used car market in 2025?

And, what does Carma offer it?

The Australian Used Car Market in Context

In order to understand the environment Carma is entering as a listed business, it’s essential to appreciate the dynamics that’ve driven the Australian used car market, especially in this decade.

The outbreak of the pandemic, and the subsequent delays in production and shipping of new cars to Australia, resulted in a significant squeeze on local supply for a time.

Demand for new cars certainly remained, but the sudden shortage of new supply generated a surge in demand for used cars.

2023 brought news that the worst of the pandemic had passed. The World Health Organisation declared in May of that year that it no longer represented a “global health emergency”.

But, the return to racing form of the global car industry wasn’t an overnight event. 

Akin to how some prior infectees spoke of ‘long covid’ following the illness, so too was there a lingering effect of the pandemic felt across the auto world. 

Even as conditions globally became more favourable for new car production, the headaches caused to consumers by inflation during and after the pandemic also continued to play a role.

Then, there has been the semiconductor chip shortage. 

It’s played a significant role this decade in slowing the roll of new cars off the assembly line. 

It’s also indeed generated new headaches again here in 2025. 

In sum, by many measures the wheels have spun well for the used car sector in the 2020s. 

Yet, this year has also seen growing expectations of change across the landscape. 

July brought data which showed conditions shifting to be more favourable for buyers. 

Used vehicles listed for sale were up over 30% year-to-date to June 2025, compared with the same period in 2024, according to the Australian Automotive Dealer Association and AutoGrab’s mid-2025 Automotive Insights Report.

Looking Under the Hood

Carma’s co-founders are Lachlan MacGregor, CEO and Executive Director, and Yosuke Hall, CCO and Executive Director.

Lachlan has previously served as a director in the investment banking division of UBS and in private equity at Oceania Capital, alongside having spent time in senior investment roles at Platinum Asset Management and Alphinity Global.

Yosuke’s first role was an analyst with Goldman Sachs JBWere, thereafter he joined Zanui.

Commencing as a business development manager and thereafter switching to head of operations, Yosuke ultimately became CEO of the online retailer, holding the position for seven years between 2013 and 2020.

In total, approximately 25.9m new shares were to be issued via Carma’s IPO, alongside the sale of 11.1m existing shares by SaleCo. SaleCo is “a special purpose vehicle, established to acquire Existing Shares from Selling Shareholders and to sell them to Successful Applicants under the Offer”.

136.7m was listed as the total number of shares on issue on the offer’s completion. $369m was listed as Carma’s market cap at the offer price, and $300m as the enterprise value at the offer price.

The prospectus notes Tiger Global and General Catalyst are along for the ride as significant shareholders, with the former having a 26.8% holding and the latter a 4.3% holding, upon completion of the offer.

Carma has indicated the proceeds from the IPO will be put towards the expansion of inventory.

The business has sold over 6,000 retail cars since its founding in 2021.

In turn, the funds raised will also go to its working capital, its cash reserves, and to further grow the Carma brand in the marketplace, among other goals.

Kicking the Tyres on Carma

The aspiration to provide a streamlined and seamless experience for users sees Carma place a premium upon emphasising trust in its product, and flexibility in the post-purchase stage. 

This section’s focus hereafter is on the pitch the B2C space is seeing from Carma. 

Yet, it’s important to note at the outset that Carma also has a wholesale lane for dealer-only auctions. 

This serves as an additional sector for revenue, and gives the business an avenue to sell stock it deems unsuited for its B2C holdings. 

Carma moves into its new chapter with numerous accolades already under its belt. 

Furthermore, alongside awards from Power Retail and ORIAS (among others), as the Carma site details,

“Our rigorous inspection, reconditioning, and quality assurance processes make us the preferred used car dealership of the NRMA.”

Additionally, its pitch to customers that they’ve “7 days to drive and decide”, that there’s a 3-month warranty, and the vehicles are “Quality assured. Verified by a team of experts” all seek to drive home to consumers that Carma’s sales have support structures to aid peace of mind.  

These “Quality assured” and “team of experts” dynamics speak to a particular aspect of Carma that sees it operate in a different lane to some of the more well-known online used car sales sites. 

Carma is indeed a site where users can buy and sell their vehicles. 

But, it’s not one where a buyer and seller will be directly dealing with each other. 

A would-be seller deals directly with Carma when looking to transact. The same goes for buyers. 

To some potential purchasers, this model may be a turn off. 

A real gearhead ‘treasure hunting’ for a terrific, but undervalued car may feel Carma isn’t for them.

In the same vein, the fact that there isn’t any scope for haggling could also be displeasing.

Carma makes the case that their ‘haggle-free’ model “makes things fair for everyone”. 

Also, just as Carma holds its team does daily market reviews to ensure its autos are competitively priced, they say they have been “scrupulously selected and reconditioned to ensure they’re the best quality possible”. 

This will surely appeal to ‘non-gearheads’ in the used car market. 

As aforementioned, Carma has a 7-day period post-purchase to “drive and decide”. 

But it’s not possible to have a test drive of a Carma auto before purchase. 

Thus, strictly speaking, you can’t ‘try before you buy’.

Again, for those consumers who find the roar of an engine as pleasing as the sounds of an orchestra, this might not be music to their ears. 

Yet, for browsers who could find it difficult to tee up a time for a test drive – e.g. tertiary students who have class in the day and work evenings, parents of young children, and so on – the Carma model of ‘get it, and give it back if you don’t like it’, could feel heaven-sent. 

Will Customers Choosing the Freeway Take a Toll? 

Sites like carsales and Carma are an astounding marketplace for auto buyers and sellers. 

Their speed, efficiency, and range make the old model of newspaper listings look totally ancient.

But, today’s leaders of the pack are also not without vulnerabilities to new competitors. 

The carsales site pre-dates Facebook’s launch in 2004. 

But, it wasn’t until 2016 (though an earlier desktop-only version arose in 2007) that the latter launched Facebook Marketplace.

Like carsales, some fees can accompany a Marketplace listing of certain goods (and boosting the visibility of them via ads). 

Yet, that a ‘one-off’ Marketplace buyer or seller can connect, meet in person, and finalise a transaction without any fees going to Marketplace has proved enticing to buyers and sellers alike. 

Facebook Marketplace and sites like Gumtree won’t offer the same ‘one-stop shop’ uniformity in searching for a vehicle that a dedicated used car site will. 

But, Meta (Facebook’s parent company) has –like Google and other tech titans– a vast apps ecosystem with a huge reach.

Notwithstanding its controversies and its critics, it’s indisputable Meta has made an astounding success of its ‘free to use social media’ model with Facebook users over the past twenty years.

There are many parallels with Google’s YouTube and other apps in its suite. 

Any used car site charging fees must be wary of a competitor in hot pursuit of their market share. 

And if Meta turned its attention to pushing hard for more market share in this area, or another tech titan decided to enter the classifieds arena, the potential for a ‘freemium’ model to really make waves in the local online used (car) market space is immense. 

Yes, such a move may seem unlikely, but the market can shift in decisive and dramatic ways, and sometimes only be fully appreciated with the benefit of hindsight. 

After all, Blockbuster once passed on a chance to buy Netflix.

Old Cars and Young Australians 

The changing nature of home and vehicle ownership also looms as factors for the used car sector.

While it’s beyond an urgent or immense consideration, it’s indeed an ever-growing consideration.

Many major cities across Australia continue to see ongoing growth in (new) outer suburbs where living further out comes with an easier ability to purchase property. 

These are commonly called ‘car-dependent’ suburbs, and it can be expected that higher rates of car ownership will be seen alongside higher rates of home ownership in these communities.

Though a resident of an outer-suburb may feel car ownership is non-negotiable, an inner-city resident could feel it’s far more optional. 

There is no disputing that there is also a decisive trend towards higher density among established suburbs being seen across many major Australian cities.

While numerous Australian cities certainly have the scope to continue to expand the reach of their outer suburbs, the behaviour of residents in this century won’t be the same as the one prior.

In previous generations, many Australians were prepared to move further out from their city’s CBD, for the promise of home ownership, while still remaining relatively close to the CBD.

Furthermore, such a relocation often still meant being in reach of pre-existing public transport links, and other amenities.

Given the speed and scale of growth seen in Australia during this century, it’s different now. For many young Australians the raw maths simply don’t add up to being able to buy a home.

Yes, some may simply not be inclined to live further afield, even if it enabled buying a home.

Yet, there are many who feel –due to the necessity of close proximity to the CBD or inner city for their work– that it simply isn’t logistically possible to live further out and retain their living.

These factors and others will see greater density in our cities in the years ahead. 

In time, we can expect this to result in fewer cars. This means less used cars trading hands. 

The rise of ridesharing apps, carsharing apps, and even the popular uptake of electric scooters and electric bikes which have ‘filled a gap’ between the push bike and motorcycle, also play a part.

An Electric Issue: The Growth of EVs

It’s beyond the focus of this article to unpack in-depth the story of EVs in this era.

Yet, it’s certainly a consideration in play that is important to touch on.

According to sales data from the Australian Automobile Association released earlier this month, EVs accounted for almost 10% of new sales in the quarter to September, with the market share of internal combustion engine (ICE) vehicles also diminishing to under 70% for the first time.

Though it varies by model, there is evidence that suggests EVs show greater mechanical reliability than ICE vehicles. 

This greater reliability is informed by EVs having fewer moving mechanical parts.

It should be noted, the debate around the reliability of EVs vs ICE continues. Yet, the relative infancy of the mass production EV era should also be noted.

It means, while ongoing improvement across the whole auto world is continually pursued, there remains significant potential for further enhancement of EV reliability.

More EVs, with more reliability, sets the scene for more new cars staying in the hands of owners longer. 

The same would apply to used cars. 

That’s good news for auto owners. 

It’s bad news for traders who’d depend on turnover.

Keeping Eyes on What’s Ahead

Factors like increasing urban density and the uptake of EVs are important considerations. 

Yet, they certainly don’t mean used car sites couldn’t enjoy terrific success in the years ahead. 

The aforementioned are complex trends with many variables, and are not ‘one way traffic’. 

But, given the many indicators of a big scale and scope for change, they shouldn’t be discounted. 

It’d be audacious –if not foolish– to be certain about a best or worst-case scenario in this dynamic.

Yet, what is safe to say is that the factors which could significantly alter old certainties around private car ownership in Australia are many, and many are already in motion. 

Getting Mileage out of a Listing

Among the first to use ASIC’s fast-track IPO process, upon arriving on the ASX, Carma’s first day was surely not what the business would’ve hoped for.

In the first hour of trading, its stock dropped around -10%, going from an opening ask of $2.70 down to $2.43 later that morning. In the week following, it had been on offer for $2.40. 

Even if Carma didn’t roar off the line with its listing, the internals of its operation are sure to intrigue many in the time ahead. 

With its full-stack digital platform, $100m raised via its IPO, and a capacity to provide a smooth and elegant experience in the used car market, there are promising foundations on which it can build further.

In turn, just as the Car Group has been a leading success in Australia, Carvana in the U.S. has found success and acclaim since their establishment in 2012, with their now-iconic car ‘vending machines’ (first launched in 2015) and a similar offering of a 7-day test period post-purchase. 

The many variables that arise across different decades, nations, and markets affirm a repeat of success by one used car platform after another should never be presumed.

Yet, the Carvana story shows a new used car business can carve out its own unique and compelling place in the market. 

Now, it’s for Carma to get the miles up as it navigates through traffic as a newly-listed business.

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