For many consumers in Southeast Asia, the smartphone has become both a work tool and a status symbol. It is also getting harder to afford.
That tension sits at the centre of 3cat’s next phase of growth. The Singapore-incorporated, Malaysia-born retailer of pre-owned electronics has raised US$4 million in Series A funding to expand into the Philippines, betting that a more formal, warrantied second-hand device market can win over consumers being squeezed by rising handset prices.
The round was led by Foxmont Capital Partners, with participation from the Asian Development Bank (ADB) and Golden Gate Ventures. ADB has also authorised a further US$2.8 million for future funding rounds in the company.
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Founded in 2023, 3cat started as an online business focused on pre-owned Apple products in Kuala Lumpur. It has since grown into more than 20 retail stores across Malaysia, combining physical outlets, online customer acquisition, financing, warranty coverage and an internal technology platform.
Its first market outside Malaysia will be the Philippines, where the company sees a larger and more price-sensitive opportunity. The country has more than 110 million people, a young population and one of the region’s most active mobile-first consumer markets. According to Euromonitor data cited by the company, 18.4 million smartphones were sold in the Philippines in 2025, almost twice the size of Malaysia’s market.
The timing is not accidental. Smartphone makers have been dealing with higher component costs, supply chain volatility and a shift towards more expensive premium devices. In markets where wages have not risen at the same pace, the result is a widening gap between what consumers want and what they can reasonably pay.
3cat says a new mobile phone in the Philippines can now cost up to double a Filipino’s median monthly income. That makes the pitch for a cheaper, tested, warranty-backed device more compelling, if consumers trust the seller.
Turning second-hand into mainstream retail
The used-device market is not new in Southeast Asia. For years, consumers have bought phones through informal shops, classifieds, social media groups and peer-to-peer platforms. These channels are often cheaper, but they also carry familiar risks: unclear device history, battery issues, counterfeit parts, limited recourse after purchase and little consistency in pricing.
3cat’s wager is that the category can move from informal trade to mainstream retail if those concerns are addressed in a structured way.
Its model includes device checks, a 12-month warranty, return policies, mall-based stores where customers can inspect products, and online sales touchpoints. The company says most store transactions involve an online interaction somewhere in the buying journey, including engagement with its proprietary AI sales agents. In practice, customers may discover, compare or ask questions about a device online before completing the purchase in-store.
“Trust is what makes this category scalable. We have spent the last three years building it deliberately, through the quality of the devices we sell, the warranties we stand behind, the stores we invest in and the market-leading experience we deliver at every customer touchpoint,” said Karl Loo, CEO and co-founder of 3cat.
The company claims its devices can be up to 60 per cent cheaper than new equivalents. That price gap matters in Southeast Asia, where demand for smartphones continues to grow but consumers remain highly value-conscious. It is also where the circular economy angle comes in: extending the life of electronics can reduce e-waste, one of the fastest-growing waste streams globally.
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For ADB, that environmental and inclusion argument appears central to the investment.
“3cat is helping build greater confidence in the second-hand device market by bringing clearer standards around quality, reliability and after-sales assurance,” said Charles Navarro, Investment Specialist at ADB Ventures. “As the company expands in Malaysia and the Philippines, its model has the potential to help raise standards across the wider market while extending the useful life of devices.”
Why the Philippines matters
The Philippines is a logical but demanding next step. It is one of Southeast Asia’s largest consumer markets, with high social media usage, strong mobile commerce behaviour and a population that often accesses the internet primarily through smartphones. At the same time, household purchasing power remains uneven, especially outside major urban centres.
That creates space for a retailer that can offer relatively aspirational devices, especially iPhones and higher-end Android models, at lower prices. But expansion will require more than opening shops. The company will need to build supply, refurbishment standards, customer service operations, financing partnerships and brand trust in a market where second-hand buying is already common but fragmented.
Foxmont’s participation is notable because of its local knowledge. The Philippine venture capital firm has backed consumer and commerce businesses in the country, giving 3cat a potential advantage in understanding retail behaviour, site selection and local partnerships.
“Across Southeast Asia, smartphones are both essential and aspirational, but premium devices are increasingly out of reach for many consumers,” said Jelmer Ikink, Managing Partner at Foxmont Capital Partners. “3cat makes refurbished electronics trustworthy, warrantied, and accessible.”
3cat’s founding team brings a mix of regional retail and technology experience. Loo is joined by Chris Ng, a former founding senior executive at Oppo Malaysia, and Heinrich Wendel, who has worked across product, technology and digital businesses.
A crowded race for trusted resale
3cat will not have the regional used-electronics space to itself. Southeast Asia already has several players trying to professionalise refurbished and second-hand devices.
CompAsia, founded in Malaysia, operates across multiple Asian markets and works with brands, telcos and enterprises on device trade-ins and resale. Reebelo, which has roots in Singapore and Australia, runs an online marketplace for refurbished electronics and has expanded across several markets.
Carousell, while broader and more peer-to-peer in nature, remains a major channel for second-hand phones in the region. In the Philippines, informal mobile shops and Facebook Marketplace also remain powerful competitors, especially on price.
The difference 3cat is trying to build lies in its mix of physical retail, warranty, financing and digital sales support. That omnichannel approach may help convert buyers who are interested in cheaper devices but uncomfortable with purely online second-hand transactions.
The challenge is whether that model can scale profitably. Physical stores build trust, but they also add rent, staffing and inventory costs. Device quality control is operationally complex. Used-phone prices can move quickly as new models launch and older ones depreciate. And in emerging markets, financing can expand affordability but also introduces credit and collections risk.
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Still, the broader direction of travel is clear. As smartphones become more expensive and replacement cycles lengthen, Southeast Asia’s used-device market is likely to become more organised. Investors are increasingly looking at circular economy models that combine commercial viability with resource efficiency.
For 3cat, the Philippines will be an important test of whether its Malaysia playbook can travel. If it works, the company could position itself not merely as a reseller of old phones, but as part of a new layer of consumer infrastructure: one that makes quality devices more accessible without pushing every buyer towards the latest new handset.
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