Online classifieds marketplace operator Carousell is exploring a merger with a special purpose acquisition company, or SPAC, to go public in the United States, Bloomberg reported, citing people familiar with the preliminary discussions.

The development comes barely three weeks after Carousell named Edwin Chan, a former Razer executive, as its chief financial officer. Chan is known for steering Razer to a successful IPO in Hong Kong in 2017.

In November 2019, Carousell merged with 701Search, a classifieds firm and subsidiary of Norwegian telecom company Telenor Group that has business holdings across Southeast Asia. At the time, Carousell was valued at more than USD 850 million. Then, in September 2020, Carousell landed a USD 80 million investment from South Korean tech company Naver to hit a valuation of USD 900 million, inching toward unicorn status.

Carousell operates in Southeast Asia, Taiwan, and Hong Kong. The company recorded 124% revenue growth for its financial year ended 2020. In all, 70% of Carousell’s visitors are millennials, and one-third of its revenue is now drawn from its used car marketplace. This dips into a business sector where specialized platforms like Carsome and Carro have gained traction. Singapore-based Carro, in particular, joined the unicorn club in mid-June, while Malaysia’s Carsome is reportedly in talks for a USD 200 million investment that will do the same for the company.

Southeast Asia has hit an inflection point in e-commerce and digital payments, which are both strong drivers for Carousell, according to Herston Powers, managing partner at 1982 Ventures. “Carousell will be able to command a USD 1.5 billion valuation and we expect it will grow larger in the long run,” he said.

“Many of Southeast Asia’s unicorns have been ready to list in the past few years but have not had the same institutional coverage from banks and investors as their peers in China, India, and Latin America,” said Powers. “The market is ready now, as global investors are starting to see opportunities in the region. The rising popularity of SPACs is perfectly timed for Southeast Asia as a listing option that is faster, with a guaranteed price or valuation, and greater deal certainty.”

Listing activities in the next six months will be extremely active with a mix of conventional IPOs in the US and Indonesia, as well as US public debuts via SPACs, Powers believes.

A litany of tech-empowered companies that mushroomed in Southeast Asia in the past decade are considering SPAC mergers to float shares in New York, pointing to a maturing regional tech sector. Grab expects its listing process to be completed by the end of 2021. Carsome, as well as Indonesian travel ticketing platforms Traveloka and Tiket.com, are considering a similar route.

The Bloomberg report indicated that Carousell’s plans for listings are subject to change.

Read this: SPAC attack! Southeast Asian unicorns ditch conventional IPOs