Carsome, But For Car Servicing? ServAuto's RM24M Raise

Digitalizing Malaysia's Automotive Aftermarket with ServAuto's Vision This is a podcast from BFM 89.9, the business station. Speaker 2 BFM 89.9 Good morning and welcome to Open for Business, the show that dives into the journeys and ventures of entrepreneurs and business leaders. I'm Roshan Kanisen You might buy a phone case or maybe a cheap tech gadget on TikTok, but would you trust a live streamer to handle your car's maintenance? Well, that's the 24,000,000 ringgit bet being made by Surf Auto Founded in 2024 by former custom executives, the company is attempting to digitalize Malaysia's fragmented automotive aftermarket through an online to offline model using live commerce and TikTok. They claim to have clocked in an average of 10 million monthly views in 2025, while having served 30,000 customers in just one year. Armed with that six million U.S. dollars in funding, their next target is to hit 500 workshops from the 150 they have in their network today. But there's attention and views equal hard revenue. But we'll break that down today as well as a focus on on their TikTok focus, what stops car owners from cutting them out of the equation for future use and of course, whether your workshop uncle really wants to digitalize. Joining me to discuss this and more I have with me Serve Autos Co founder and CEO Paul Young. How? As always, whenever you want to reach out to us here at BFM, you can WhatsApp us at our U Mobile number. That's 0187898899 boy. Welcome to the studio. Speaker 3 Thanks. Thanks Roshan. Thanks for having me. Speaker 2 So, you know, boy, when something goes wrong with my car, my first instinct isn't to open an app. I take out my phone, I call my buddy Michelle. He's the car guy in our friend group, and he tells me exactly which uncle's workshop I need to go to to sort my car out so I don't get scared. And when I surveyed the office, almost everyone kind of said the same thing, right? Oh, I call my father, I call my mother, I call my brother. Basically it was along the lines of I know a guy In a market where word of mouth is so important, why would I ever use Surf Auto? Speaker 3 Sure. I think definitely because right now in market, right, there's a lot of moms and pop shop, right. But what you are trying to do here is not to replace the mom and pop shop, but in fact we are trying to consolidate them by putting them into a more structure way, right. For instance, it the different sector structure. I mean, we've served for our pricing is transparent, process are standardized and part sourcing is traceable. With this, we actually can help the month and pass shop to make them more structure. Then more importantly, we can help them do the lead generation as well because a lot of month and pop shop, what happened to them is actually actually rely on what amount like you say, but the customer acquisition side is actually quite passive. But what happened to Surf Photo? If they were to join our network, we will help them and guide them how to do lead Gen. as well. It's not only about lead Gen. but it's more to how do you do CIM? How do you manage customer retention? I think that's where Surf Photo come into this picture. Speaker 2 Because as I understand it, there's a lead Gen. perspective. There's also that digitalization perspective as well, right. And you largely opposite operate with this triangle of cars, parts and workshops. You're right when you say you're you want to help standardize the mom and pop shops out there of which, you know, every corner row of shops will have one. Yeah. What does that mean? Speaker 3 Yeah, if you take a look at moms and pop shop, where do they get their supply from? They are getting from a retailer. Where retailer get it from distributor, distributor from manufacturer, each of the layer actually does additional 220 to 50% of margin up, right. With that, how do you ensure the workshop can earn much, right? So by working with us, we actually work directly with the supplier or manufacturer. So we actually help the moms at Pop Shop safe in terms of procurement cost. Secondly, in terms of the the Legion like I mentioned as well, right, So instead of them putting the bench outside of the workshop wait for the customer, we actually wanted them to use before customer come with our appointment system, right. So what happened right now is actually our customer actually booked in advance. So the workshop we actually expect who will come tomorrow, how many slots there will be parts being prepared is still last minute because last minute parts requests will be ad hoc pricing. So if for instance, your last meeting request for certain thing, you of course need lala move, right? That's actually increased the cost of logistic, hence the outcome of the service cost as well. So all this can be prevented, of course, lastly, which is store management as well. Right now, if you take a look at all the months and pop shop, they don't manage any customer retention. If you were to ask them, do you have a database? They say I have, but the database is not about to bring the customer in, but it's more to protect themselves, right? So what happens actually, we can actually every six months and reminder to them send the offer to customer. I think that's where we will help them as well. Lastly, of course, is the labor as well, right? Right now everyone know it's really hard to get AI would say capable technician, right. So what happens? Actually, we work closely with our Academy, like customer Academy, to actually bring talent back to the industry. Yeah. Speaker 2 So you're almost like an enabler for the ecosystem. So you consolidate, help them digitalize, but also essentially become that single buyer for on the supplier and manufacturer part of the equation. The hope being that of course with that scale that you can optimize for prices. Speaker 3 Definitely. Speaker 2 We'll get into that in more detail a little later, but the way I look at this is that on one side, of course, you still have to compete with the trust that the neighborhood workshop might have. You know, my father's been going to this workshop XYZ number of years, and then I go to that out of legacy or just habit. But on the other side, more interestingly of course, is that we've got foreign giants coming to the scene, right? Heavily funded Chinese players like Tuhuka Care aggressively entering the Malaysian market. They've got 2 places so far. I think it was the end of last year. But as we've seen with other brands out there in FM in particular, there is a bit of a second China shock that's happening caught between the local uncle that a car owner will have a relationship with between and the $1,000,000 foreign franchises that are coming in where they serve or to fit in this equation. Speaker 3 Sure, definitely. I think different models solve different problem like last year like 2 who their focus on skill and centralized control route. Independent workshop rely heavily on personal relationship, individual expertise. Right? But what happens for us actually we see in between, we don't own every workshop, we actually standardized system behind them and pricing, part sourcing, workflow, performance tracking. This allow us to actually move faster than a fully centralized chain, while of course delivering consistency than a standardized workshop. Speaker 2 Underlying a lot of this, right is this presence that you have on Tiktok right now, something along just under 21,000 followers. But with Tiktok, of course is the views that matter more than the follower counts. And you've your biggest video is 2.4 million. You got a few between 1 and 1.1 and 1.5, and a lot of them between a three and 5000 viewpoint, but you've only been active for what, 6 months now? Speaker 3 Yeah, in Tiktok actively see June last year. Yeah. Speaker 2 Why are your banking on TikTok and live commerce? Why ServAuto Bets on TikTok for Customer Conversion Yeah, of course. I mean there's a different, I mean different timing has a different way of customer acquisition channel, right. So we actually see that TikTok is actually our big bet to actually get a customer acquisition because from TikTok itself, we can actually do a live video is actually to to provide a Valance customer for those that high intent. They go to our live stream to understand more product where our live streamer can actually explain to them, because you think about that car services is not something that everyone know because a lot of time you say my father know my boyfriend where will like always claim me as a mechanic friends, right. So, but not everyone has to make a new friend. That's where they need a source to go to, right. So we believe that you were to go to say Google you Google by yourself. You still need to understand by yourself, right? But if you go to live stream, you can actually ask the live host. They can probably answer this probably certainty that only you can place an order. So we we think this is a big bet and it's kind of proven since we did it last year. Yeah, last year June, right. So I think we are proud to say that we are first go to online to offline seller in TikTok, yeah. Speaker 2 You mentioned a keyword that that with TikTok you've seen conversion, that's why it's been so important for you. Is that not the case with other platforms like Instagram for example? Speaker 3 Yeah, of course, Instagram. Imagine right now moms and pop shop, where do they go, right. The the easiest way for them to think they are doing marketing is where Meta is. They'll set up Meta page, sorry, Facebook page, IG page, They think they are doing melody, but that is more about branding and awareness, right? But what happened for Tiktok is more about conversion. That's why over the past several months that we've our focus is more on conversion, yeah. Speaker 2 So Tiktok is converting people to make purchases. You are seeing that, yes, wow. But you know, this is obviously in the early days, your first 12 months or so as a business. Will you be looking to expand that reach beyond Tiktok in time? Speaker 3 Yeah, definitely. How Tinting Becomes ServAuto's Customer Acquisition Strategy I mean, yeah, thank goodness with the the funding that we have, right, Because not everyone know that know, know about present, right. Because we, we, we mainly focus on our TikTok channel, but we have funding that we have that we hope that we we can increase our awareness as well, hence that we are, we are going to come up with a big campaign soon. So you'll see us in in IG, Facebook and the rest of our platform. Speaker 2 So right now I understand that your primary things that you sell, of course servicing packages, yeah, but also tinting. Speaker 3 Yeah, of course. Speaker 2 Tell us about the tinting. Why? Why is that such a big focus for you? Speaker 3 Yeah, think about that, right. So customer acquisition, you have two states of customer position 1 is actually when customer buy a car, right? When you buy a car, what do you need, right? You need window tinted firm, you need dash Cam Carmack, that's where you need, right. So we, we want to tap into this in the early stage to bring them into our ecosystem. Once they're out of warranty, they can actually jump into another ecosystem which is servicing. Also if they are in the ecosystem of under warranty as well, they can actually use our services for tire as well. Yeah. Speaker 2 So it's almost like the tinting is the entry point to serve auto. Speaker 3 In a way, yes. Yeah, OK. Speaker 2 And just to be clear, when we talk about the customer demo for what Serve Auto is providing, this is mostly owners of second hand cars or out of warranty. Speaker 3 Cars, yeah. So I think the stats actually we have about 30% new car, 70% or new. Speaker 2 Cars as well. Speaker 3 Yeah, of course, because for Tinter mostly new car as well, right. So, but even Tikalo is surprisingly you only have a TikTok as well. Yeah, the stats for Tinter for used car is a lot as well. Speaker 2 Yeah. So I presume tinting goes across the board for whether it's a new car or a second hand car or pre loved car. In terms of servicing, I would presume that would be more. Speaker 3 Yeah. So we see the search in three to five years. That's why people are already because a lot of time when we do a survey or we speak to our customer as well, right. Why so? Because they always go back to the OEM, but they need a choice, right? So that's that's where they come to us. Speaker 2 I think that's a common pain point for a lot of us, right. Once a car goes past the three to five year warranty mark, do you continue going back to the OEM where you know, it might be a little pricier or do you find a workshop to work with? But how do you know whether this workshop is worth working with? Yeah. So I think that's where. Speaker 3 That's where you copy the picture. Yeah, Yeah. Speaker 2 What makes you think boy, between you and your Co founder Han, that what you're building here is large enough to justify raising six million U.S. dollars, right? How big is the scale potentially here? Speaker 3 Wow, I mean you take a look at Malaysia's car registers about 80 million, Yeah, so that's about 50K register workshop as well. I think you can count market in future. So what happens actually right now there isn't any single go to, right? You ask anyone where do you service a car, do you say, or nearby house? Ask my mother, ask my father this and that, right? Like make any friend, right? But you don't actually see one, one or two big player. I think that's where we aim to be here. Speaker 2 So you you want to be top of mind when people think, oh, I need to service my car? Speaker 3 Definitely because right now you think about as a car owner, you go to services right now you kind of worry because you do know what's the pricing like you do know what parts they are using, but this thing should be changed, right? So at this era, we want things to be transparent, pricing transparent, part transparent. Even the inspection report as well. A lot of time when they say tire is Potter, is it really Potter? Those can be measured though, and you. Speaker 2 Know sometimes you get your your quotation and then the new parts that are recommended changes and you have no idea whether to do it or not. That's when I send that PDF to my friend and then he has to tell me whether it's worth it or not. But we've got more to get into. Speaker 4 Bulldozing fine measures. BFM 89.9 the business station. Speaker 2 BFM 89.9 welcome back to open for business. I'm Roshan Kinison and today I'm speaking with Paul Young, how the Co founder and COO of Surf Auto Founded in 2024, Surf auto is using tech to bring much needed consolidation and transparency to the opaque world of car maintenance. Armed with 24,000,000 ringgit in funding, they've already scaled to 150 workshops in their network. But as they chase their next big target targets ahead, we'll discuss the operational reality of protecting their unit economics and scale. Consolidating Mom-and-Pop Workshops with Branded Models Part of the interesting things we talked about earlier, of course was the TikTok driven model that you're using right now because you mentioned a few times it helps to drive conversion before you and your Co founder Han started. So of course, you were working both at Qasem, which aimed at that time to bring sanitization to the used car market. Right now you've jumped into the automotive aftermarket, which is arguably has a similar level of shadiness as we were touching upon a little later. Is your tech enabled to play here? Simply the Carson playbook applied to mechanics and workshops. Speaker 3 Yeah, I think we can say the same as well. You think about what the custom founder Eric Chang and JD as well what they built for the past 10 years is to try to disrupt the traditional way of way of how customer buy and sell used car, right. So imagine you were the car owner PSD you want to sell used car, you tend to go one by one insurance used car dealer to ask for quotation. But right now with Custom, you just go to 1 centre, they can actually which give you multiple quotation one time, right? It's essentially the same things, right? What happened that like I mentioned earlier, we want to consolidate assisting workshop, especially month and part. We are here to help them and work together. We, we actually, because there's actually adequate workshop number like 50K register workshop. It's not that there isn't enough supply, but there is robot. Just how can we level up their skill set, store management skill, how to manage customer? Yeah, those are actually what customer wanted. Speaker 2 And when you say you work with, you're consolidating the mom and pop environment, it's mainly to to models, right. So you've got the the branded model, which is basically a franchise model like a Mishwe or a McDonald's really. And then you've also got then the partner model. Tell us a little bit about what's the difference between these two pathways of working with you. Yeah. Speaker 3 Sure. So I think our MDC is definitely have M2 half hundred hour branded store. So for the past six months or or last year, for instance, what we focus on has been when we started, we started like we started like more work on a partnership like where they go to the workshop we say or I actually have this a bunch of demand, right? Can you just help me do the fulfillment right? So part is from me, customer is from me, they just do the fulfillment. But what happens actually customer need trading, customer need good pricing. I'm not talking about inferior pricing, but good pricing. Second one is actually product quality, product, right? Third one, of course is the customer service, right? So what happened for the past last year, we have been focused on more on control pricing and control quality of product. But if we were to work with partnership sometime we are not able to standardize the customer service. Hence that this year our focus will be more on building out more of our branded store. So the difference between branded store and also the partnership branded store, we will definitely get more leads from us. At the same time we will teach them no how in terms of lead generation, custom store management, of course spare parts as well, spare part supplier. Speaker 2 And with regards to the branded stores, I understand that most of them are kind of like, again, a franchise model where they take your name, the branding, the supplies come from you, they do the fulfillment and the servicing on ground. Yeah. Are all of them franchisees or do you have your own stores as well? Speaker 3 Yeah. So we actually started our own. Why so? Because a lot of time if you just provide theoretical without practicality, people wouldn't trust, right. So especially we are on the service lab, I mean we are on servicing industry. So we really need to listen to what customer want. That's that's why we actually open up some of the stores actually owned by us, but the rest is actually franchise. Speaker 2 And the importance of that being that you need to understand what the on ground reality is for these service. Speaker 3 Levels, definitely, yeah. Speaker 2 I suppose some of the press releases I've seen in the 1st 12 months served 30,000 customers through a variety of whether it's servicing or tinting that currently 150 workshops in the network, getting a lot of views online as well. But how well does all of this translate into real money? Boy, what, what, what are we looking at in terms of annual revenues? What can you tell us in terms of scale? Sure. Speaker 3 I think you can count ourselves on a 200 to 300 order in a day, so yeah. Speaker 2 2 to 300 orders in a day and what's the average ticket size you're? Speaker 3 Looking at our average is about 300, our average about if you're mixed with the Internet and service, right? So it would be about 4:00 to 5:00, right? Speaker 2 So that's a ticket size and you can do their back end mathematics based on that. Now in terms of the business model here, as I mentioned earlier, there's a triangle going on, right? So you've got the car owners that come into, you said look up Serve Auto and then go to your workshops. You've got the workshops that you either work with in the partnership model or a branded model with them. And of course you've got the relationships you have with the suppliers where you get parts and you can supply to your ecosystem. How does Serve Auto make money from all this? Speaker 3 Yeah. So there's few parts, right. One part of course is the package margin. We sell direct to customer, so online to offline. What is the beauty is actually you actually get the money first before the customer actually go to workshop for service as well. So this will help out your cash flow, right. So one thing is actually package margin. Second one, when the customer go to workshop, that's where we have our inspection report. We don't force up sell. I mean we actually tell the reality of the condition of car. So we actually have wise customer if certain thing you need to be changed immediately, you have to otherwise you can change it next time. That's actually where the up sell margin, the one of course is the supply margin as well. So the the flow, the the flow of the spare part where from our site to some photo to our franchise store, that's where we earn our supply margin. Speaker 2 Yeah, Yeah. Because I'm presuming with that scale you can command some pricing power and some of that can be taken to your margins as well as. Speaker 3 As definitely brand, yeah. Speaker 2 Do your I presume with the branded stores they have to pay a franchise fee as well? If not, how would that work? Speaker 3 Yeah. So right now we are actually, look, we actually charge your franchise fee about 40K. So this we actually, yeah, this actually help them. Like we have a expansion team where we hire from some of the big brand like charging my news, some of the guys are in my team as well. So we'll focus there to help them build the store, right? Secondly, we also have our key account where we will help them how to manage the store, right. Of course few parts actually like lead Gen. do video or this. We will teach them as well. Speaker 2 Yeah, What's it like going to a workshop and trying to convince someone to join you? I did. Speaker 3 I've been doing that for, I don't know, last year. It's crazy, but I think it's not easy because this market has been on tradition, right? So everyone were to, if you always tell people I'm from a tech company, I kind of picture an idea. People think you might be a scammer, right? So what happened here we started differently. We actually provide them a customer which is demand, but at the same time we provide them the supply. So they do not they actually have nothing to lose. All they have to lose is just a manpower 15 minute job. Yeah, see whether trust us now, but I think a lot of time is more to yeah, how we pitch them to ask them try a one to two until right now sort of sort of workshop we actually give there about 10 or 50 customer in a bun, yeah. Speaker 2 Because you're not only just convincing them to join you from like a lead Gen. but you you're getting them to move up from pen and paper and carbon paper and all of this to digitalize. Yeah. What is the most interesting thing you've seen from a workshop you've gone to in terms of how they currently operate? You don't have to name anybody, but what have you seen? Speaker 3 Yeah. But because I think luckily at this era people know that need to change, right, Especially moms and pop that I mentioned earlier. I mean, if they were to accept the job I given to them, they just wait there, wait for customer cause know when the customer will come, right. So this actually give them some give us our opportunity for them at least to try and some more. We do have our partner portal as well. Our partner portal is actually quite easy to use. We actually share with them the the customer information when the appointment car players so on and so forth what service they come right. So this kind of convinced them because I don't want to trouble them with a lot of people. Well I just want to show them instead of me calling them or WhatsApp them. The customer will come, I just share them a portal where they can see but. Speaker 2 You need to show them that their lives will be easier. Yeah, yeah, yeah. Probably. We've got to go into the news bulletin. When we come back, we'll talk a little bit about how you keep them in your ecosystem instead of them just coming to you once and saying I'll deal with the customer directly going forward. Speaker 4 Business filled minds. BFM 89.9. Speaker 2 BFM 89.9 welcome back to open for business. I'm Roshan Kinison and today I'm speaking with Paul Young how the Co founder and CEO of Surf auto founder in 2024. The company is using tech to bring transparency and consolidation to the opaque world of car maintenance. Armed with 24,000,000 ringgit in funding, they've already scaled to 150 workshops in their network, but have bigger targets ahead, including hitting 500 locations as well as scaling the business. Much bigger than that boy, Just before the news bulletin, of course, we were talking about what it's like to go and acquire merchants or workshops into your network, you know, and you've got these two models, right? You've got the branded play, which is kind of like a franchise model as well as a partner model. Now, platform businesses like this often burn a lot of money to acquire that supply to bring these people in. But with this model, there's a key risk, right, That the car owner uses you to find a great workshop or a great workshop finds lead Gen. and then from then onwards they just deal with each other going forward and cut you out. This would ultimately kill your unit economics. So how do you stop that from happening? Ensuring Stickiness and Value in ServAuto's Ecosystem Sure, I think. Speaker 3 Yeah. So a lot of player I think we are not new to this industry as well a lot of tech player that previously came and they they close right. So why so is because they just become a lead Gen. channel. They don't control the product and pricing. But like I mentioned earlier, why customer were to choose us is to we control the product and we control pricing. So if you talk about if a mom's and pop shop able to bypass us, yes, they need to have our MO Q to hit our lowest procurement cost, which essentially they are not able to do so, right? So, yeah, so I'm actually not quite worried that the the the customer will bypass be a customer come to us. That's for certain reason, which is like I say, price, product, service, right? So even even though if you say a mom's at pop shop, they can actually make the customer become their own customer. I think this is great news because you actually they will join us to actually become a franchise as well, right? Because at the end I can give them more bullet such as more customer such as more system to manage store of course lastly supply. I think this is actually been been for me and a Monson pap shop. Speaker 2 So the stickiness here really comes from the supply part, right? Because again, one or two momma pap shops are not going to be able to get the same level of supply scale to get A to get a wholesale price on parts. So that's your secret sauce here. Speaker 3 Yeah, that's one. But you think about that from customer perspective. I mean customer wanted someone they can rely on as well. If we do something wrong as well, they go to social media complaint, right? So if you talk about months and pop shop, they don't feel this certainty, right? So I think the assurance here is actually they come and yeah, come and complain and we can solve for that. I think that's what a lot youngster they wanted assurance. That's why they go to the platform for purchase as well. Speaker 2 So there's a certain level of branding here as well, right? So wherever around the world you go, if you find a meshware or McDonald's, you know what to expect from it. There's a standard process that's almost a standardized product you can expect. Yes, that's the aspiration here. Speaker 3 Yeah, definitely. Because right now you were to go to any single workshop. Right now, the first thing you will ask yourself is actually how much they will charge me. Even the particular technician, we will tell you the price. The second question is actually what part they are they are changing for me, right. So I think these are if you go to McDonald's, you wouldn't have this, you wouldn't you actually have this certainty what you're going to get. That's where we want customer come to us. They know certainty what they're going to get from us. Yeah. Speaker 2 You've been around since 2024, but I understand really operations over the last 12 months, Yeah. Now marketplaces or platforms like this, again, you've got a supply and demand issue, right? You need to get workshops on your platform in order to get consumers to join. You need to show demand and to get suppliers to be able to sell you things as well. How have you seeded the platform over the last 12 months or what is it taking to do that? Speaker 3 Yeah. So essentially we do not want to be marketplace. So we actually been toiling around, right. So it went essentially I think since June, we kind of found our moment where we do live stream. We we double down, we it's a big bad. We focus more on that. That's we that's where we see a pivotal changes. But actually it's not only on TikTok as well. If you take a look at we are present in other platform like touch and con mini app. We are there as well. We work closely. We shall be paid as well. So customer who purchase motor insurance, they get to enjoy our voucher. So, yeah, we are not only on TikTok, but we actually work together with how the partner active partner around, right? Because essentially car is quite important for Malaysian, right? So a lot of player wanted to jump into the automotive, but there isn't another player to to work with them. So I think we we we are here to work with those partner. Like I mentioned, your insurance company, fleet management, new car dealer, dealership, yeah. Speaker 2 Since you, since you brought it up, talk to us about the range of partnerships here because obviously you have a, you've you mentioned Custom Academy earlier in terms of talent, shoppie pay later you just mentioned as well. But again, when you are building a platform like this, a brand like this, you are basically you. You want to be synonymous with aftermarket care for cars. Yeah. What are the other potential partnerships that could come up from this? What are you looking at? Speaker 3 Yeah, definitely. There's a lot of dealership, right, Like car dealership right now you go to traditional way, you buy the car, the sales agent will potentially sell you the Tinter, right. Then they actually give you a voucher. Then you actually go to the Tinter shop, they will upsell you sort of thing. But for us, we we just want to walk with corporate to corporate where we give you the fixed price. Things are transparent same online to offline. Yeah, those is 1 potential partnership we can go into. Second one, of course, is a fleet management. I'm, I'm talking about or, or, or you talk about those E healing company as well. That's where we are potentially working with. And lastly, of course, the insurance as well. Yeah, insurance you require a lot of. Yeah, emergency service, so on and so forth. Speaker 2 I mean, E hailing could be such an interesting play for you, right? I don't know whether you've ever been to that workshop in Kottada Mansara where basically they just service grab people, use vehicles for grabs and it's just, it looks like a showroom for a particular car. That's something that you're looking to bring into the network. Speaker 3 Yeah, I'm definitely looking to bring benefit back to the the committee, right, Because we, we do have the product. Our, our, our cost is related below. That's that's where an E link driver can actually enjoy the the good product. We are low pricing from us, yeah. ServAuto's Strategy for Growth and Profitability You've raised or you closed a six million U.S. dollar round earlier this year, I think it was announced about a month ago. And you've got some big targets ahead, including I think you mentioned Finder workshops, but also to process something around the lines of 50,000 cars a month in time. How are you going to hit those targets ahead? Speaker 3 Sure. I think that's couple of points here. So probably all cluster strategy, so network intense density. So we actually going to focus on building a small cluster within the city to actually make people feel actually our motto is actually your neighborhood auto care expert. That's why we want to be in all the neighborhoods, right. So whenever every 5 kilometer you will see us. I think that's actually one right. Second one is actually sorry, density, also improved brand recognition like I mentioned, supply chain efficiency and operational oversight as well. Second wise of course is a standardized onboarding engine. We want to structure onboarding into a repeatable framework. So assessment, SOP, training, system integration, supply chain alignment, this actually kind of help us to expedite the expansion plan like to to reach 500. Of course, third one is actually supply chain is anchor. Like you mentioned earlier, supply chain is key for us. So right now we are actually working with sort of big guy like Bosch, Petronas, yeah, so and so forth, right. So we will go into manufacturing as well with our own brand with some of big guy as well that will lower down the cost as well where you will bring cost saving for the customer. So of course lastly is a performance based allocation. So we those workshop under our franchise franchise management, right, those are high performance. They will receive more leads from us. So yeah, this kind of creator competition. So if everyone do go, they will get more benefit. That's why they continue to serve the customer well. So to summarize, I think in order to reach this four, we have cluster strategy, standardized onboarding, engine supply chain and last D visual performance based allocation. Speaker 2 And you're not just in in the Clang valley, right? You're quite quite present across the. Speaker 3 Peninsula. Yeah, we are. We are in about 60 CD across peninsula now. What's? Speaker 2 Interesting about what you just said, of course is going to manufacturing as well. You know, you build a brand, you can apply the brand to a variety of products in the aftermarket space. When could that become a reality because obviously you're focused right now on getting your product market fit right today, yeah. Speaker 3 Actually in fact manufacture like our Tinder firm, our dash Cam are already manufactured under our brand. So this was introduced back in Q3 last year. OK. Yeah. So you talk about service related product, I hope by next quarter time to the essence. So yeah. Speaker 2 As you scale your business, you've got a lot of targets ahead. You've raised institutional capital as well. And now if we look back to your former employer, KASM, and that generation of startups, they were built during an era of cheap capital and growth at all costs. You know, aggressive bit scaling was rewarded. Today, the venture capital ecosystem is shifted quite a bit. You know, there's a lot of focus on capital efficiency. There's a lot of focus on profitability. You've raised quite a sum of money here. As you look back to the previous generation of startups, what lessons in science or strategies are still applicable from that era today, but also what have are no longer applicable of what you've had to unlearn? Speaker 3 Yeah, of course you talk about hot money is no longer available right now. People want profitability. So unique economy is very important for us. Hence cash burn is not something in our mind. Yeah. That's why we, yeah, we actually focus more on unique economy to actually prove it. Speaker 2 And what does that mean for you, right? How do you fundamentally ensure that your unit economics don't break as you scale the business? Speaker 3 Yeah. Of course, you need to think about this. Funding goes to where if, yeah. So we kind of like I mentioned to you, there's a couple of things, right? When your volumes goes up, your product cost can be lowered down as well, right. So we are also using tech as well to kind of streamline the cost. For instance, what the example I can mention to you is actually if you were to say go to workshop right now, you ask for total, can we say absorb a if a workshop do not have the parts, right. The workshop we actually buy immediately from retailer, the cost actually showed up drastically, right. But for us, we actually on the online to offline, we can expect What Car to be coming. We can use our data to see to look at our supply chain as well. With that, we can be prepared now we can lower down the cost. Speaker 2 So there's certain areas here where you can apply efficiency optimization to ensure your unit economics don't go beyond a certain point for yeah, yeah, buying from retail and buying from wholesaler is a big. Speaker 3 Difference of course there's another part where I can mention it's also customer retention as well. So first, first time customer, you actually provide them on pricing. Second time is about standardization and inspection report make them come back. So if they were to come back, of course your customer cost of cohesion would be so, so, so much lower, right? So that's how we prove to them that you need to come back second time, right, right. How? Right. Of course, it's actually back to three things, right? Service, product and pricing. Speaker 2 So ultimately, like a lot of other businesses in this space, your unit economics comes back down to the lifetime value you can. Speaker 3 Yeah, of course, of course from customers, of course, of course, because you think about that car is a repeated, right. It's not just one time off, right. So you think about our product, we have Tinter product, we have our service product as well. People come on Tinter on a new car or when they buy a a car, even a used car as well, they come to us when it comes to service, They come back to us in this in this scenario. I already saved my 2nd Legion course, Yeah. Speaker 2 So I think it was something we mentioned earlier that tinting product is really the entry point for a lot of people to come in. And then from there, oh, OK, I can service my car here next time as well. Yeah, given your, you know your personal background with you and your Co founder were from Qasem. Sovato has an official after sales partnership with Qasem as well. Although the fact that you have common shareholders in the form of Gobi Capital, Gobi Partners and VIN Capital, and you're also using Custom Academy as a talent pipeline mechanism, how deep is this working relationship with Custom today? Speaker 3 Yeah, I think because custom they are the largest in buy and sell, right. So I think we want to partner with them to kind of provide more benefit back to the committee by conquering from buy and sell to after sales. That's where we work closely on the whole user journey as well. So from buy to sell to after sales. Speaker 2 Some level of integration here. There's a natural synergy between the both. Speaker 3 Definitely there isn't much of the contradiction, but it's more to helping each other to provide more benefit back to the community. Speaker 2 As we come to the closing our conversation today, of course one of the key things if you're looking to really scale this business is to eventually go regional. ServAuto's Regional Ambitions and Long-Term Vision I know we have Chinese competition coming to the region. I know Indonesia has its own players as well. At what point would it make sense for serve auto to? Speaker 3 Look, abroad, yeah, we get asked a lot on this price, so. But I think essentially what we focus on right now is to Malaysia, Yeah. So just share with you be it's my family's actually on automotive business as well, but I have never been in the business for the past 15 years. But I mean, it's good to be back in automotive. But then what we want is really to transform this industry. So definitely Malaysia industry year, we've been focused. But of course, you talk about OC, we also look at South Asia, Media East, of course, potentially Latin as well. Yeah. Speaker 2 To wrap up our conversation, given the lessons from tax hubs that came before that have struggled to provide exit, exit avenues for investors, are you building self auto for more of an IPO trajectory or is the model more suited towards AM and a target in the longer term? Speaker 3 Yeah, we are open for both option actually. Yeah. But right now, the main focus we still, yeah, we have to be operational mature first, then we talk about that, yeah. Speaker 2 Boy, it's been a pleasure speaking with you. Good luck with everything ahead. Speaker 3 Otherwise, thank you. Speaker 2 Folks are speaking with Paul Yong Ho Young how the Co founder of Surf Auto founded in 2024. This tech enable automotive app to sales platform has scaled from a single workshop to a network of 150 locations across Malaysia. If you missed any part of the conversation, you can catch the podcast on our website at BFM dot my or by downloading the BFM app and listening to our shows there. I'm Roshan Kinison, this has been open for business on BFM 89.9 the business station. Speaker 1 You have been listening to a podcast from BFM 89.9, the Business Station. For more stories of the same kind, download the BFM app.