Autochek’s big ambitions for the automotive industry in Africa has earned it a big cheque from investors barely four months after it was established.
The investors led by TLcom Capital and 4DX Ventures with inclusion from Golden Palm Investments, Lateral Capital, Kepple Africa Ventures, MSA Capital, and a number of local angel and seed investors signed the dotted lines to help Autochek secure a $3.4 million pre-seed funding to enable it to grow markets like Nigeria and Ghana, as well as make further investment in technology and expand its technical talent.
Founded by Etop Ikpe, former CEO of Cars45, Autochek had in September announced the acquisition of Cheki, a vehicles’ marketplace, owned by Ringier One Africa Media (ROAM). A new platform was expected to relaunch before the end of the year.
Read more Why I resigned from Cars45 to build Autochek – Etop Ikpe
In a statement announcing the funding, Autochek said it plans to create a single marketplace for all automotive services that include everything from sourcing and financing transactions to aftersales support and warranties.
In an interview with BusinessDay in September, Ikpe said Autochek is on a mandate to fix the fragmentation that currently exists in the automotive market. Less than one percent of vehicle purchases in Nigeria, for instance, are transacted through institutional finance.
“If you look at the industry overall, it is not possible to provide everything. If you look at the brand new car industry there is support there. 99 percent of the cars that are driven originate from being used cars. There is no efficient after-sales support. These are the sectors that we are aiming to solve. If we can bring all these sectors together, then people can have a better buying experience. People cannot finance a car if they do not have a guarantee that the car they are spending money on is going to be maintained, not by road-side mechanics who depreciate the car,” Ikpe told BusinessDay.
The acquisition of Cheki Nigeria and Cheki Ghana means Autochek gets the opportunity of ready-made assets of 20,000 unique vehicles listed on its platform, more than 12,000 dealers and private sellers, and a range of corporate partners and customers.
This extensive network of dealers has enabled the Autochek platform to address the challenges with buying, selling, and repairing cars in Africa such as access to finance (for both consumers and dealers), maintenance, and insurance, and bring greater value to care dealerships by enabling and enhancing automotive commerce across the continent.
“This early-stage investment allows us to get started with the work of developing technology products and services that will transform automotive trade on the continent, whereby we significantly improve transactions and aftercare support for car owners, dealers, and other stakeholders across the African automotive industry,” Ikpe said.
Autochek also plans to facilitate cheaper and more effective transactions for dealers and corporate partners, leveraging its industry relationships to buy and sell vehicles on behalf of the customer for the best price and ensuring value for money.
On its mobile application – available on Android for now – enables existing and new car owners to access loans, auctions, trade-ins, and maintenance. Dealers will have access to real-time car auctions, fleet management, marketing support, and standardised reports on car conditions and market value, as well as inventory management, CRM for lead management, and garage management systems for car workshops.
“Autochek is radically improving customer experience and dealer economics in an industry that creates value and jobs across the continent and we are excited to be part of that journey. The founding team has a clear for what they want a achieve and we look forward to working with them as they execute on their vision,” Andreata Muforo, partner TLcom said.
Africa is widely regarded as the final frontier for the global automotive industry, with growth prospects over the next decade. Despite the impact of COVID-19, car sales are expected to grow across the continent, with a corresponding rise in demand for support services. However, a range of existing challenges, including limited access to finance and an opaque and fragmented marketplace means car owners and dealers do not always enjoy the best.
“We are proud to enter this partnership with Autochek as the company embarks on its mission to transform Africa’s automotive industry,” Walter Baddoo, managing partner at 4DX Ventures said. “By providing access to a new range of products and services, the company will dramatically enhance the automotive access to a new range of products and services, the company will dramatically enhance the automotive transacting experience for dealers and the ownership experience for consumers across the continent.”
