Following its pre-seed round in November 2020 where it raised $3.4 million, African automotive company Autochek has secured $13.1 million in a seed funding round. The seed round was led by pan-African VC firms TLcom Capital and 4DX Ventures who also led the pre-seed round. Other existing investors that participated in the round include Enza Capital, Lateral Capital and Golden Palm Investments. First-time investors include Mobility 54 Investment SAS, ASK Capital and CFAO Group.
The just-concluded funding round brings the total amount the automotive company has raised to $16.5 million. Since its launch in August last year, Autochek has seen tremendous and ground-breaking growth in all aspects of its business operation.
The recent fundraising follows the company’s acquisition of Cheki Kenya and Uganda from its previous owners – Ringier One Africa Media (ROAM) for an undisclosed amount, which follows about a year after its acquisition of Cheki Ghana and Nigeria. Autochek made these acquisitions to kickstart its business in Nigeria and also to expand into newer African territories. It, however, did not apply the same formula in Ivory Coast. Instead, it partnered with CFAO Group to bring its marketplace into the Francophone region.
Autochek is currently present in five African markets and wants to leverage the opportunities that lie in the multi-billion used car market in Africa. Autochek is addressing issues like the lack of transparency, loan offerings to prospective buyers, etc., that makes the used car market a space that people hardly want to step a foot in.
Autochek works with banks to provide financing and after-sale services. Before a vehicle gets placed in the market, Autochek runs a series of tests to ascertain the condition of a car. Once the car has been confirmed to be in a good condition, it gets financing from partner banks and places it on the market.
Autochek has seen tremendous growth in its numbers from last year. During its seed round in November last year, the automotive startup had partnerships with 12 banks. It currently has partnerships with about 70 banks including big names like Access Bank, United Bank for Africa (UBA), pan-African bank – Eco bank, etc. With these partnerships, the company has processed over 46,000 loan applications, from 10 applications in November last year.
Autochek which started out with only used cars has expanded its product offering and now has a financing product for new cars and trucks. The company has done well for itself as seen in its numbers. It now has over 1,200 dealerships using its network with more than 15,000 financeable vehicles on the marketplace.
Although it has acquired Cheki Ghana, Nigeria, Kenya and Uganda, Cheki Tanzania, Zambia and Zimbabwe still do not belong to Autochek and although there are clear expansion plans for the company, it is still unknown if it plans to acquire the aforementioned wings of Cheki in the future. The company is, however, looking to expand northward and southward Africa and has Egypt and South Africa at the top of its priority list.
“We are speaking to a few partners around potentially how we can make entry and I think between now and probably Q2 next year, we would have kind of identified the best kind of product-market fit for those markets. But we expect that by Q3, we should have a presence in those markets,” Autochek’s CEO and co-founder Etop Ikpe said about the proposed Egypt and South Africa expansion.
Autochek faces competition from other automotive tech companies like Moove, Planet42, and FlexClub, which have started receiving attention from investors as the need for flexible vehicle financing keeps growing across the continent. Yet despite the seeming competition, Autochek CEO Etop Ikpe believes opportunities exist for the company to provide services tailored to the market different from what other companies have. “The beauty of our platform is that we can be diverse; for instance, we can have a retail or B2B approach. There’s a lot of dynamic ways we can work. So I think it’s natural that our goal is to typically be in every region. We’ve made our inroads into East and West, and we’ll continue to work as we want to be in North and South Africa”, CEO Etop Ikpe said last month after its Cheki acquisition.
Autochek plans to become a market leader in the automotive space and plans on doing this by taking over several African territories. With vehicle penetration rate standing at a meagre 5 percent in a car market worth $45 billion, Autochek stands to gain a lot from expanding to as many countries as possible.