Just after securing $3.4 million pre-seed funding, precisely in November 2020 the company reportedly delivers a fresh fund. However, it comes according to the company’s press release that Africa’s automotive company – Autochek scored $13.1M in its latest seed round.
Having witnessed an overwhelming growth in demand since launch in August 2020, ranging from consumers, banking partners, and business, which eventually fuelled a seed round led by pan-African VC firms TLcom Capital and 4DX Ventures. Funny enough, these were the same investors that had the conviction to lead the startup’s previous pre-seed funding.
In addition to the aforementioned investors, the current round also witnessed the existing investors, such as Golden Palm investments, Lateral Capital, and Enza Capital. Which also include first-time investors Mobility 54 Investment SAS and ASK Capital, equally, the venture capital arm of Toyota Tsusho and CFAO Group. Bringing Autochek’s fundraised to $16.5 million held in two rounds.
The subject startup had last year acquired Cheki Nigeria and Cheki Ghana in order to start its business, and to double down on that trajectory, it has confirmed the acquisition of Chike’s businesses in Kenya and Uganda from Ringier One Africa Media (ROAM), which made up the company’s core expansion, while for the Francophone region, notably Ivory Coast – the startup reportedly took a different part by partnering with CFAO Group as a way of bringing its service to the market.
Looking used cars market in Africa which is believed to be a $45 billion industry, yet a market with a vehicle penetration rate at a meager 5%. That is also not an issue but a lack of transparency that made lending (from commercial banks) a huge challenge in offering loans to individuals, commercial drivers, and other entities.
In view of this, Autochek’s platform was developed to operate a marketplace-driven model which focuses on financing and after-sales. However, the company’s customers cut across dealerships, banks, and end-users (those who purchase cars via Autochek’s platform). On the other hand, the startup’s platform which is structured with assessments and some algorithmic checks is designed to help give a sense of the status and condition of a car, which helps determine whether it is in a state to be financed. This is because, when a dealership signs up on the platform, Autochek assigns a workshop to commence inspections on the vehicles own by the dealership.
“That’s the big risk for the banks because they do not want a situation where they finance a car and the next day, the engine knocks”, Autochek’s CEO ‘Etop Ikpe’ explained why the company goes through these processes.
Further on this line, notably, one of the key reasons why subject startup was braced with the latest (Autochek scored $13.1m) is the fact that the company has a well-structured platform that ensures quality service across dealerships and banks. And this is because, after inspection, Autochek notifies all the banks on its platform that the vehicle is ready to be financed and moved to the marketplace. Then with an extensive review, the banks respond with their offers. While paving way for the end-user via a pool of financing rates specifically from the banks to select from and can apply to buy the car after the startup has developed a credit profile. While the icing on the cake is the loan application process that takes about 48 hours, down from an industry standard of 40-45 days.
As soon as the basics have been sorted, Autochek supports the banks in disbursement and ensuring that the vehicle is properly registered, insured, and tracked. Yet, the services of the subject startup do not end there but cut across the lifecycle of each loan. The CEO Ikpe noted:
“We’re not just there for the banks and customers at the point of disbursal; we stay with them throughout the lifecycle of the loan”. Adding that, “We’ve built that ecosystem using technology to stitch all these various verticals together so that at the end of the day, we can create more value with financing being our core driver within the platform”.
Meanwhile, as the company settles in West and East Africa, it noted that it has plans for North and South African markets – precisely Egypt and South Africa, possibly by Q3 next year.
- Please, what’s your take on this?