Two years after launching its trust-focused peer-to-peer marketplace in Canada, South Korean technology unicorn Karrot has surpassed one million registered Canadian users.
Karrot describes itself as a “community-driven super app.” Through the company’s mobile and desktop platforms, users can: buy and sell a variety of secondhand goods, and access community groups, jobs, real estate, and automotive listings, as well as payment solutions.
Under the leadership of Ritual and GoodGood co-founder Robert Kim, who joined Karrot as CEO of the company’s North American operations in early 2023, Karrot has set its sights on launching its app across Canada and the United States (US) as part of a broader push to replicate the success that it has seen in South Korea in other markets around the world.
Over the next year, Karrot plans to build a 15 to 20-person engineering team in Toronto.
“Karrot has done an amazing job of connecting neighbourhoods within Korea, and the dream is to do that across the globe,” Kim told BetaKit in an exclusive interview. He said the firm selected Canada and the US as one of its “starting points” given the diversity and size of the North American market.
Karrot currently has five employees in Canada working on its growth team. To support its expansion across the continent, Kim said Karrot has chosen Toronto as its North American engineering hub, citing its diversity and mobile and artificial intelligence (AI) talent. Over the next year, the tech company plans to build a 15 to 20-person engineering team in the city.
On peer-to-peer marketplaces, scams and safety issues can be rampant. Karrot facilitates transactions via GPS user verification, uses AI to detect potential signs of fraud or danger on its app, and assigns users trust scores to foster a more trustworthy buying and selling process.
In Korea, Karrot first earned user trust through its secondhand marketplace, which then made it easier for the company to venture into other verticals, Kim said. “What we’ve seen is that as [the] trust level goes up, the amount of items or categories or types of items that you’re willing to [buy and sell] increases and that typically puts the marketplace into a second gear.”
Today, Karrot claims that the average Korean household uses its app for 20 to 25 minutes per day. The app is not listed in the commerce category, but under social. “The engagement is insane,” said Kim.
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After seeing significant growth in its home country during the COVID-19 pandemic, in 2021—amid a much hotter venture market—SoftBank-backed Karrot raised $161 million USD at a $2.7-billion valuation to fuel its international expansion.
In early 2022, Karrot co-founder and co-CEO Gary Kim (no relation to Robert) moved to Toronto and the firm first launched its North American business after identifying an opportunity to launch Karrot’s app in the city and tap into Toronto’s tech talent pool.
For Robert Kim, who previously co-founded a pair of Toronto-based community commerce apps in Ritual and GoodGood, and helped develop Google’s local buying and selling capabilities, Karrot marked an opportunity to remain focused on this space.
“It was all the things that I wanted to previously build in a local [commerce] product.”
Robert Kim, Karrot
Robert Kim, who got to know Gary Kim and became familiar with Karrot’s app during his time at GoodGood, said, “It was all the things that I wanted to previously build in a local [commerce] product.” After he pulled the plug on GoodGood following fundraising challenges, Kim decided to join Karrot, first as an advisor and then as CEO of its North American business.
Karrot has spent time localizing its product for North American users on not just a language but a cultural level, positioning itself as a “neighbourhood marketplace,” and invested in educating the market on how verification works and why it matters. The firm has set its fraud detection tech to a default of high for North American users, compared to medium in Korea.
Today, Karrot is available in neighbourhoods across Toronto, Vancouver, a slew of other Ontario and British Columbia cities, New York, and Chicago. After hitting one million registered Canadian users last month, Karrot is looking to expand its presence in existing cities and move into more than 50 new markets across Canada and the US over the next five years.
Amid a crowded field of digital peer-to-peer marketplaces, Kim views Karrot’s focus on connecting users to other folks in close geographic proximity (its initial radius in Canada is set to within five kilometres) and its emphasis on building trust as two of the things that differentiate its app from other available options.
“We use every technology that we have access to to help you have a safe transaction with people [whom] you can trust,” said Kim.
Feature image courtesy Karrot.
