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African automotive technology firm, has received $13.1 million in seed funding to help it scale its technology
Autochek, an African automotive firm, has raised a $13.1 million seed round over a year after receiving a $3.4 million pre-seed round in November 2020.
Since its introduction in August last year, the firm, managed by CEO Etop Ikpe, has witnessed astounding rise in demand, not just from consumers but also from its corporate and financial partners. And who better to lead the seed round than pan-African VC firms TLcom Capital and 4DX Ventures, the same investors who led the startup's pre-seed round?
Existing investors such as Golden Palm Investments, Enza Capital, and Lateral Capital also contributed. ASK Capital and Mobility 54 Investment SAS, the venture capital arm of Toyota Tsusho and CFAO Group, were among the first-time investors. Autochek has raised a total of $16.5 million in two investment rounds.
When Ikpe talked to TechCrunch last month, the company had recently completed the acquisition of Ringier One Africa Media's Cheki's assets in Kenya and Uganda (ROAM). The transaction was completed about a year after Autochek purchased Cheki Ghana and Cheki Nigeria to launch its company.
Although acquisitions have been the company's primary growth strategy to date, it did not pursue that path into Ivory Coast, instead partnering with CFAO Group to introduce its marketplace to the Francophone area.
With this growth, Autochek now has a presence in five African markets. The used automobile market in Africa is worth $45 billion, with a vehicle penetration rate of only 5%. And, because the market is opaque, lenders (mostly banks) have found it difficult to make loans to people, businesses, or ride-hailing drivers.
The Autochek platform employs a marketplace-driven paradigm with an emphasis on finance and after-sales. Its key clients include dealerships, banks, and end users (those who buy cars on the platform).
When a dealership registers on the platform, Autochek assigns a workshop to begin inspections on the dealership's cars. The evaluations and algorithmic checks on Autochek's system serve to provide a sense of the car's status and condition, deciding if it is in a state to be financed.
"That's the huge risk for the banks because they don't want a situation where they finance a car and the engine knocks the next day," explained Ikpe, explaining why Autochek goes through these measures.
Following the examination, Autochek notifies all of the banks on its platform that the car is ready for financing and adds it to the marketplace. The banks react with their proposals after a thorough assessment. After Autochek builds a credit profile, the end-user has a pool of financing rates from banks to pick from and can apply to buy the automobile. The loan application procedure takes around 48 hours, as opposed to the industry typical of 40-45 days.
Once everything is in order, Autochek assists banks with disbursement and ensures that the car is registered, insured, and monitored. The vehicle is then sent through Autochek's after-sales network, where it is fixed for free if mechanical faults arise.
Autochek generates revenue by charging clients and banks a fee following a successful payment and by receiving commissions from dealerships.
"We're not simply there for banks and clients at the time of disbursement; we're there for them throughout the loan's lifecycle," Ikpe explained. "We've established that ecosystem by utilising technology to connect all of these different sectors so that, at the end of the day, we can produce more value with financing as our core."
Posted on : 30 Jun,2022 | News Source : ABNews