Autochek, the automotive technology company facilitating auto financing across Africa, has today secured $13.1million in seed funding.
The new funding, secured just under a year after Autochek’s $3.4mn pre-seed raise, will be used to strengthen its core auto loan processing platform and deepen its footprint in East Africa and West Africa, starting with its recent entry into Cote d’Ivoire.
The funding was led by follow-on investors, TLcom Capital and 4DX Ventures, including participation from existing investors, Golden Palm Investments, Enza Capital, and Lateral Capital.
“At Autochek, our driving force is to increase financing penetration on the continent; we have been amazed by the market adoption rate and the support from our banking partners in the countries we operate in. We stepped into this space knowing we were tackling one of the most significant challenges for Africa’s automotive sector – the lack of a simplified, digital-first financing process,” Etop Ikpe, Founder and CEO of Autochek, said.
Also, the company is rapidly expanding its footprint across East Africa, following its recent acquisition of Cheki Kenya and Cheki Uganda, East Africa’s online auto marketplace.
As part of the investment by Mobility54, Autochek will leverage Toyota Tsusho’s vast retail network across 46 African countries to further deepen its expansion.
“We are extremely delighted with the progress we’ve made in a short amount of time. With this funding and the support of our strategic investors, the entire team at Autochek are dedicated to delivering exceptional service for customers and partners, as well as deploying our technology across Africa,” Ikpe said.
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Launched in October 2020, the company operates across East and West Africa in five countries – Nigeria, Kenya, Ghana, Uganda and Cote d’Ivoire. It combines technology, serving as a foundation by data analytics to deepen auto finance penetration across the continent.
Autochek has built in-house digital solutions such as Collateral Management, Dealer Management Systems and an exclusive customer relationship management (CRM) system for managing stakeholder operations within the ecosystem such as vehicle financing, inspection, valuation, and inventory management.
Since its pre-seed raise in November 2020, the platform has achieved rapid traction across its business, most notably in the area of auto-financing where the number of processed loan applications rose from just 10 in November to over 46,000 to date.
The company has enjoyed partnership with 70 banks across the continent including regional players such as Access Bank, Ecobank, UBA, Bank of Africa and NCBA Bank.
The startup has also achieved several key milestones since the start of the year including over 1000 dealers on the Autochek network actively using the loan processing solution, and over 15,000 certified and financeable vehicles on the Autochek marketplace across its markets.
Over the course of the year, Autochek also launched its truck financing platform and more recently, financing of brand new vehicles.
“Autochek has achieved significant traction in one of Africa’s key verticals and is making impressive progress in bringing transparency and efficiency in this complex and fragmented industry. The foundation of its growth has been the strong leadership of its CEO, Etop Ikpe, a repeat founder in the automotive market whose world-class experience gave us the confidence to initially invest in Autochek in 2020,” Andreata Muforo, Partner at TLcom, said.
Despite being a $45bn industry, Africa’s used car market only has a five percent financing penetration rate, marking a major contrast to the rates of 98 percent and 99 percent in Europe and the USA respectively.
Due to a lack of transparency from the automotive sector, there is no way for lenders to understand the present and residual value of vehicles, creating a significant reluctance to issue loans.
However, with Autochek’s established links with car dealerships and 150-point inspection and valuation reports, the company can access vital information on the quality and condition of a range of vehicles, providing lenders with the much-needed trust and transparency to make informed decisions.
“Autochek is revolutionising the auto industry in Africa by offering the convenience and selection advantage of an auto e-commerce platform together with the added flexibility of financing. We have enjoyed working with the team so far, and they have demonstrated the talent, ambition, and domain expertise needed to build a complete end-to-end car ownership experience for customers”, Walter Baddoo, Managing Partner at 4DX Ventures, said.
