Malaysian startup 3cat eyes making secondhand phones premium in the Philippines

MANILA—For Filipinos looking to own a premium smartphone without paying full retail prices, buying a secondhand device can offer significant savings. But concerns about product quality, hidden defects and unreliable sellers remain barriers to wider adoption.

Malaysian startup 3cat is betting that stronger quality checks, warranties, reliable sourcing and physical stores can help change that.

The refurbished-gadget retailer has raised $4 million in Series A funding as it enters the Philippines, its first international market. The round was led by Foxmont Capital Partners, with participation from ADB Ventures and Golden Gate Ventures. 

Founded in 2023, 3cat operates more than 20 stores in Malaysia. It sells pre-owned electronic devices through online and physical channels, with a business model built around making secondhand technology more accessible and dependable.

“We ensure that every device that we sell undergoes a 56-point check and we back our quality with a 12-month warranty,” 3cat CEO and co-founder Karl Loo said.

The company says its approach addresses a longstanding problem in the secondhand-gadget market: consumers want affordable devices, but they also need confidence that what they are buying is genuine, functional and supported after the sale.

Loo said 3cat aims to make secondhand technology the first choice for consumers rather than an alternative they consider only when new devices are too expensive.

“The core of our business is to change mindsets,” he said. “Our mission as a company is to make second-hand tech the first choice, top of mind.”

That ambition depends on establishing credibility in a market where consumers may encounter different standards of quality, pricing and after-sales support.

Loo said 3cat works directly with sources such as telecommunications companies and major international retailers. The company says this sourcing strategy, together with device inspections and its warranty, helps distinguish its offering from less structured sellers.

“I think for too long, Filipinos haven’t been able to rely on a store that is able to provide them both affordability as well as quality,” Loo said.

The company’s claims about its inspection process, warranty and sourcing practices are central to its pitch to Filipino consumers. Buyers should still check the specific device’s condition, battery health, warranty coverage and return policy before making a purchase.

One of 3cat’s key lessons has been the importance of having physical locations, even for a business that also relies on online sales.

Loo said the need for physical touchpoints was among the biggest surprises in growing the company. Stores allow customers to see and handle devices, ask questions and engage with the retailer before committing to a purchase.

“Offline builds the trust and brings us close to consumers, and online helps us scale,” he said.

According to Loo, about half of the company’s transactions involve an online touchpoint. That figure is a company-reported estimate, but it illustrates how 3cat sees its physical and digital channels working together rather than competing with each other.

The strategy may be particularly relevant in the Philippines, where consumers can compare prices across online marketplaces but may still want reassurance when purchasing an expensive used device.

For 3cat, the physical store is not simply another sales channel. It is part of the effort to establish credibility, support customers and encourage repeat purchases.

Loo said the Philippines and Malaysia share a consumer base that needs access to high-quality electronics at affordable prices. He also pointed to Filipinos’ extensive use of mobile devices and social media as reasons for entering the market.

“I think we both have population bases which are in need of affordable, high quality electronics. We both are lovers and high users of mobile gadgets,” he said.

He added that the Philippines has particularly high social media usage on mobile devices.

The opportunity comes as consumers face pressure to make their technology budgets go further. A refurbished device can offer access to a higher-end model at a lower upfront price than a comparable new unit, although actual savings depend on the model, specifications, condition and selling price.

The broader global market also points to growing interest in used smartphones. International Data Corporation projected that worldwide used-smartphone shipments would grow 3.2% year over year in 2025, compared with a projected 1% increase for new smartphones. These are global forecasts, not figures specific to the Philippines. 

For Filipino buyers, the practical question is whether the savings justify the condition and support trade-offs. For retailers such as 3cat, the opportunity is to make those trade-offs more transparent and predictable.

Loo’s expansion into the Philippines also highlights the challenge of turning a startup’s ambition into a business that investors are willing to back.

3cat’s US$4 million Series A funding gives it capital to pursue its next stage of growth. The company’s expansion plans, however, are tied to the need to maintain stable operations as it enters a new market.

Loo said a bold vision is important when seeking funding, alongside evidence that the business is gaining traction. In other words, founders must communicate where they want to take the company while demonstrating that the business model is working.

For startups, that means a compelling growth story must be supported by execution, customer demand and the ability to operate sustainably.

Loo also stressed the importance of finding the right partners overseas. Those relationships helped 3cat scale its operations and supported its move beyond Malaysia.

The company’s Philippine entry therefore represents more than a geographic expansion. It is a test of whether its operating model, sourcing relationships and customer proposition can work in a different market.

Despite its regional ambitions, Loo said startups must avoid expanding faster than their operations can support.

He said 3cat moved into the Philippines only after its Malaysian business had become stable enough, its team had established a consistent operating rhythm and day-to-day operational problems were more manageable.

That approach matters for a retailer whose promise depends on consistent product checks, dependable sourcing and after-sales service. Rapid expansion without those systems in place could undermine the very trust the company is trying to build.

For 3cat, the challenge now is to translate its Malaysian experience into a Philippine business that can deliver affordability and reliability at scale.

Its broader ambition is to change how consumers view used electronics. Whether that becomes a mainstream choice will depend not only on price, but also on the quality of the devices, the credibility of the retailer and the customer experience before and after a sale.