Africa’s car marketplaces continue to grow thanks to digitalization and increasing interest from investors looking to leverage the gains in the space. The number of startups looking to revamp the space, especially the used-car category, keeps increasing and Sylndr is one of such startups new to the space.
Sylndr has raised $12.6 million in pre-seed funding. The funding round has led by Saudi-based early-stage venture capital firm RAED Ventures and saw the participation of other investors such as Global Founders Capital, 1984 Ventures, Nuwa Capital, and Algebra Ventures. The round also saw investments from angel investors around the globe. Sylndr’s pre-seed funding of $12.6 million is the biggest of its kind in the MENA and sub-Saharan African region.
Based in Cairo, Sylndr provides an automotive marketplace that allows customers to buy and sell used cars. In Egypt and Africa, there is a huge demand for used cars and this is because they are far less expensive than a new ones. One major challenge that occurs with transactions such as these is the problem of trust. In Egypt, for instance, brands such as Mansour Automotive, GB Auto, and Nissan have high resale value but people lack good experiences with buying these cars because of the lack of trust, and this is the main problem that the used cars marketplace Sylndr is trying to solve.
According to co-founder and CEO Omar El Defrawy, “The main problem that we’re trying to fix in Egypt is a complete mistrust between buyers and sellers of used cars in the markets. That’s the core problem that we’re trying to solve. Our vision as a company is that we want to quickly become the most trusted used car retailer in Egypt and the region.”
The startup is also looking to provide car financing for people so that they can own cars. In Egypt, just like a handful of many African countries, there are hardly any systems in place to help citizens acquire cars through vehicle financing. “So imagine if you enable financing and make the cars much more affordable to people, that’s a core value proposition we want to ship as well,” the startup’s CEO added.
Sylndr was founded in November 2021 by CEO Omar El Defrawy and Amr Mazen. The startup’s model is very similar to the established car marketplace Cars24. Like Cars24, Sylndr buys cars from people looking to sell and ensures they are in good condition before reselling them to new owners.
Moving forward, the startup has quite a lot of plans. It plans of providing a seven-day money-back guarantee, warranty, and flexible financing options to users, its founders revealed. It will, however, update its car listing first. It plans on launching to customers who are looking to sell their cars before opening up to buyers by either the last quarter of this year or the first quarter of the next.
There are concerns that cars put up for sale on Sylndr may be more expensive when compared to other marketplaces. The startup’s CEO, however, claims that offerings will be fair and competitive adding that customers would prefer to buy cars from Sylndr because of its quality and its delivery speed. “It’s not a matter of prices being more; it’s a matter of paying for value. If you’re a consumer who doesn’t have any car experience, you’d want to buy something that gives you true value to the amount you’ve put in. Customers buy used cars and try to do the refurbishment independently, but no one has that kind of experience. That’s what we do, and of course, if they can find that car and execute this process in 24 hours, it becomes an even much nicer and better experience,” he said.
The startup hasn’t started making money yet but plans to do so from retail sales, dealerships, B2B sales, etc. The CEO says that the startup is looking into other sources of revenue including interests in insurance, maintenance, financing, and value-added services. “We’re looking to develop that as we go,” he said.
“The secondary car market is highly fragmented and more often than not, consumers do not have a trusted counterpart. The market is massive, ripe for disruption, and we’re excited to be part of Sylndr’s journey as they transform and set an entirely new standard for the used car market. Given the unique background and experience of this team, we believe in their ability to crack this business model,” Omar A. Almajdouie, managing partner at RAED Ventures said in a statement.