Grace Ashiru
Ventures Platform and MaC VC have recently led a $7 million funding round for Shekel Mobility, an African B2B marketplace for auto dealers. Africa’s burgeoning automotive market, as highlighted by the World Economic Forum, sees a yearly demand of 2.4 million cars and 300,000 commercial vehicles. Rising disposable incomes, a growing middle class, and rapid urbanization across the continent drive this surge. Despite this demand, car ownership in Africa is significantly lower than the global average, with less than 45 cars per 1,000 people compared to 203 cars per 1,000 globally.
In the automotive industry, startups like Autochek and Moove have made waves by catering to consumers and drivers. However, there is a substantial market opportunity in offering services to dealers, especially in vehicle financing. Affordable credit is vital for small car dealers, aiding daily operations and reducing costs. This, in turn, benefits consumers, resulting in more vehicles on African roads.
Shekel Mobility, a YC-backed startup, operates in this crucial area. The company has recently raised over $7 million, which includes $3.2 million in equity and more than $4 million in debt. Co-founder Benjamen Oladokun revealed in a TechCrunch interview that this funding is key to quadrupling the startup’s current Annual Recurring Revenue (ARR) of just over $2 million. Earlier in January, the company announced a $1.95 million pre-seed investment led by Ventures Platform, with contributions from Y Combinator, Voltron Capital, Zedcrest, and others.
This recent seed round, co-led by Ventures Platform and MaC Venture Capital, also saw participation from previous investors like Y Combinator, Rebel Fund, and others. Debt financing was provided by entities like Zedvance, VFD Microfinance Bank, and others, some of which utilized Shekel Mobility’s platform to finance auto dealerships.
The founders, Oladokun and Sanmi Olukanmi bring extensive experience in the automotive sector, including their previous venture, Eazypapers Technologies. Shekel Mobility aims to revolutionize the $30 billion African used car market, helping dealers find, finance, and sell cars. With ambitions to become the leading platform in auto dealerships, locally and virtually, the company envisions transactions worth $10 billion annually by 2025. So far, it has facilitated over $56 million in transactions, supporting the growth of more than 1,400 auto dealers and the sale of around 7,000 cars.
Shekel Mobility’s main product, Shekel Credit, offers auto dealers instant financing access, with credit limits of up to $200,000 for vehicle purchases. This model typically involves the dealer contributing 30% of the car’s total cost, with Shekel covering the remaining 70% as a loan. The dealer then repays Shekel upon selling the vehicle, typically within three months, including interest and transaction fees.
This end-to-end control of the car buying and selling process through dealerships has resulted in a 0% default rate for Shekel Mobility. Olukanmi emphasized that the company focuses on financing dealers poised to make a lasting positive impact on consumers.
