Shekel Mobility, a technology company, secures $7 million in funding to revolutionize African car trading and disrupt the automotive industry.
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Shekel Mobility, a B2B trading platform tailored for car dealers in Africa, has secured a $7 million seed investment in its latest funding round. This financial backing comprises $3.2 million in equity and over $4 million in debt, with Ventures Platform and MaC VC leading the investment round.
The primary goal behind this infusion of capital is to fuel the expansion of Shekel Mobility’s operations into new African markets while fostering the development of innovative products and services within the platform.
Nigeria, recognized as the largest market for used cars in Africa with an estimated value of $10 billion, serves as a focal point for Shekel Mobility’s operations. Positioned as one of the key players in this lucrative market, the company stands poised to capitalize on the continuous growth of Nigeria’s economy.
The Nigerian used car market boasts a significant scale, with an annual sale of over 1 million used cars. Forecasts from a 2022 Statista report suggest a prospective escalation of the Nigerian used car market to a value of $1.3 billion by 2025.
However, despite this burgeoning demand, Africa’s car ownership remains notably lower than the global average, standing at fewer than 45 cars per 1000 people. To address this gap, emerging startups like Autochek and Moove have aimed to cater to consumer and driver needs. Yet, a critical need persists for solutions designed specifically for vehicle sellers in Africa, a void effectively filled by Shekel Mobility.
The existing market landscape in Africa remains predominantly offline and fragmented, presenting challenges for both buyers and sellers, including a lack of transparency, difficulty in sourcing suitable cars, and complex paperwork procedures.
Shekel Mobility has strategically positioned itself to tackle these obstacles by offering a centralized online platform that directly connects buyers and sellers. The platform features an array of tools empowering buyers to easily locate their ideal vehicles, leveraging detailed listings, 360-degree photos, and immersive virtual reality tours.
Since its inception, this Y Combinator-backed startup has reportedly facilitated transactions exceeding $56 million. By contributing to the expansion of over 1,400 auto dealerships and facilitating sales involving 7,000 cars, Shekel Mobility has demonstrated its impactful presence within the market.
The linchpin of the startup’s growth lies in its flagship offering, Shekel Credit. This unique service furnishes immediate financing to auto dealers, granting credit limits of up to $200,000 for vehicle acquisitions, typically ranging from $5,000 to $20,000.
Under this financing structure, the dealer contributes 30% of the total cost, such as $3,000 for a $10,000 car, while Shekel covers the remaining 70% as a loan to the dealer. Upon selling the vehicle to the end customer, typically within a three-month period, the dealer reimburses Shekel, encompassing the loan interest and transaction fees associated with the car sale.
Marlon Nichols, the founder and managing partner at MaC Venture Capital, expressed enthusiasm regarding the investment round, highlighting Shekel Mobility’s potential to revolutionize and stimulate growth within Africa’s automotive industry. Nichols emphasized how the team enables substantial financial movement within the Nigerian economy while simultaneously providing affordable automobiles to locals.
by Tony O. Lawson
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