The Nigerian-based Cars45 has created a platform that buys, sells, prices, and rates the condition of pre-owned autos, according to TechCrunch.
In fact, the start-up recently raised $5 million in funding from Frontier Cars Group, a holding company whose backers include Balderton Capital, EchoVC, TPG Growth, and NEA.
“The used-car market in Nigeria is generally a big hassle. There’s so much mistrust, no vehicle history, and not much of a structured dealer network,” says Cars45 CEO Etop Ikpe.
“We’ve created something that changes all that, offering transparency, speed, convenience, and safety in a highly frictional and opaque market.”
The Cars45 process begins online. Owners enter their vehicle information for a free quote, and then they can schedule an appointment at any one of the company’s 13 inspection centers around Nigeria.
The process continues with a multi-point evaluation of the engine, brakes, tires, and even a road test. Cars45 then makes an offer, and if accepted, the company makes a wire payment to the seller’s bank account within 45 minutes.
According to Ikpe, Cars45 then offers the automobiles it acquires to a private network of buyers. The startup’s current revenue model is based on the “fees from that private network of pre-verified buyers” who gain access to Cars45 vehicles.
Despite its current economic woes, Nigeria remains a hotbed for startup activity and venture capital investments in Africa. And like many startups on the continent, Cars45 says it is pursuing a Nigeria-first growth strategy before expanding its business to other countries.
Ikpe says the company also plans to branch out in to ancillary sectors of the local used car market, including inspection services, financing, and online auto research akin to Kelley Bluebook.
“We believe the opportunities are there to expand in to other African cities with high vehicle sales traffic…and to operate similar models in emerging markets,” Ikpe says. “That’s still long down the line, but once the right time comes we’ll definitely go for it.”
Cars45 was founded in 2016 by a team that includes Ikpe, Iyamu Mohammed, Sujay Tyle, and Peter Lindholm. All members of the team boast valuable credentials having been involved in building startups in Africa, Europe, and Silicon Valley.
Ikpe is a former MD at Nigerian e-commerce startup DealDey, and Mohammed worked as head of Operations at African used car site Carmudi (now JumiaCar). Tyle was a COO at Hired.com, and Lindholm did stints at mobile operator Millicom and Swedish fashion site Nelly.com.