This Nigerian used car startup just raised $5 million in Series A funding

folarin okunola

May 1, 2017 11:41 AM

The company’s process starts online where vehicle owners enter their car information for a free quote.

Etop Ikpe, former Co-MD at DealDey now CEO of Cars45.

A Nigerian used car startup, Cars45, founded by former Dealdey MD Etop Ikpe, former Carmudi Head of Operations Iyamu Mohammed, former Hired.com COO Sujay Tyle, and Peter Lindholm, has raised $5 million in funding.

Cars45 raised a $5 million Series A round from the Frontier Cars Group, a holding company which is backed by Balderton Capital, EchoVC, TPG Growth, and NEA, amongst others. The company will use the funding to improve its platform that sells, rates, buys and rates the condition of used cars in Nigeria.

“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,” said Cars45 CEO Etop Ikpe, according to Techcrunch. “We’ve created something that changes all that, offering transparency, speed, convenience, and safety, in a highly frictional and opaque market.”

ALSO READ: Loads of investment wisdom at 500 Startups' VC Unlocked: Lagos Edition hosted by Ingressive

The company’s process starts online where vehicle owners enter their car information for a free quote. After that, they can then schedule an appointment at any of Cars45’s 13 inspection centres in Nigeria.

After evaluating things like brakes, engine, tires and conducting a road test, Cars45 makes an offer. If its offer is accepted, the company pays the amount into the owners bank account within 45 minutes.

Cars45 then prices the cars and creates a digital service history before offering them to a “private network of buyers,” says Ikpe, Techcrunch reports. Its revenue model — for now — is pretty much based on “fees from that private network of pre-verified buyers” who are given access to the cars.

“We felt it was one of those classic startup models that brings offline online and delivers technology into a very analog business market to create real scale,” says Eghosa Omoigui, Investor at EchoVC.

Cars45 says it hope to expand into other African market at some point, in addition to replicate its model in other emerging markets.

folarin okunola

Enhance Your Pulse News Experience!

Get rewards worth up to $20 when selected to participate in our exclusive focus group. Your input will help us to make informed decisions that align with your needs and preferences.

I've got feedback!