Used cars are a big deal in Nigeria and a startup that is aggresively taking Nigeria’s informal used cars ecosystem online has just announced it has raised $5 million funding.
Cars45.com today announced it has raised a $5 million Series A round from the Frontier Cars Group, a holding company whose backers include Balderton Capital, EchoVC, TPG Growth, and NEA. According to TechCrunch, Cars45 will deploy the capital to improve its platform that buys, sells, prices, and rates the condition of pre-owned autos.
“The used-car market in Nigeria is generally a big hassle. There’s so much mistrust, no vehicle history, and not much of a structured dealer network,” said Cars45 CEO Etop Ikpe. “We’ve created something that changes all that, offering transparency, speed, convenience, and safety, in a highly frictional and opaque market.”
Here is how Cars45 works. The process begins online, where owners enter their vehicle information for a free quote. They can then schedule an appointment at one of the company’s 13 inspection centers in Nigeria.
After a multi-point evaluation including engine, brakes, tires, and a road-test, Cars45 makes an offer. If accepted, the company commits to wire payment to the owner’s bank account within 45 minutes.
After pricing and creating a digital service history, Cars45 offers the autos it acquires to a private network of buyers, according to Ikpe. The startup’s revenue model―for the moment―is largely based on “fees from that private network of pre-verified buyers” who gain access to Cars45 vehicles, he said.