Autochek, an African automaker, has raised $13.1 million in a seed round, almost a year after raising $3.4 million in a pre-seed round in November 2020. Lead investors in this round include pan-African venture capital firms TLcom Capital and 4DX Ventures, which led the startup’s pre-seed round. Golden Palm Investments, Enza Capital, and Lateral Capital were among the current investors who contributed. ASK Capital and Mobility 54 Investment SAS, the venture capital arm of Toyota Tsusho and CFAO Group, were among the first investors. So far, Autochek has raised a total of $16.5 million in two financing rounds.
The company, which is currently based in West and East Africa, has its sights set northward and southward on the continent, specifically Egypt and South Africa.
“We are speaking to a few partners around potentially how we can make entry and I think between now and probably Q2 next year, we would have kind of identified the best kind of product-market fit for those markets. But we expect that by Q3, we should have a presence in those markets,” said Ikpe.
Autochek intends to use the funds to expand its auto loan processing infrastructure, expand its foothold in West Africa, and, eventually, leverage Toyota Tsusho’s huge retail network in 54 African countries to continue its expansion.
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Why The Investors Invested
Investors are flocking to Autochek because since its launch in August of last year, the company, led by CEO Etop Ikpe, has seen incredible growth in demand, not only from consumers but also from its business and banking partners.
For instance, Cheki’s companies in Kenya and Uganda were recently acquired from Ringier One Africa Media (ROAM) by Autochek. Autochek purchased Cheki Ghana and Cheki Nigeria to start its company, and the sale was completed over a year later. Despite the fact that acquisitions have accounted for the majority of the company’s expansion strategy to this point, it did not do so in the Ivory Coast, instead partnering with CFAO Group to introduce its marketplace to the Francophone region.
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Again, Autochek has 12 bank agreements when it announced its pre-seed round last year. The number of banks has grown to almost 70, including Access Bank, Ecobank, UBA, Bank of Africa, and NCBA Bank. According to the firm, these banks have processed over 46,000 loan applications to date, up from only ten in November.
Furthermore, Autochek’s decision to expand its vehicle categories beyond used cars has resulted in a significant increase in the company’s size. More than 1,200 dealerships already use Autochek’s network, and over 15,000 financeable vehicles are on the market across all markets since the company’s financing solution for trucks and new automobiles was launched.
TLcom Capital re-invested in the one-year-old company because of Ikpe’s drive and experience, as well as Autochek’s blitzscaling expansion, according to partner Andreata Muforo. It’s because the team has shown “the skill, ambition, and domain understanding needed to construct a complete end-to-end car ownership experience for clients,” according to Walter Baddoo, managing partner at 4DX Ventures.
A Look At What Autochek Does
Launched in October, 2020 and managed by a developer team in Lagos and Nairobi, Autochek is a network for consumers and businesses to buy cars, sell cars, service cars, and finance cars sales. The startup was founded by former Cars45 chief executive officer (CEO) Etop Ikpe. Autochek’s model, according to its CEO, is based on a marketplace concept, with a focus on finance and after-sales services. Dealerships, banks, and end users are its main customers (those who buy cars on the platform).
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When a dealership registers on the platform, Autochek sends a workshop to begin inspecting the dealership’s automobiles. The assessments and algorithmic checks on Autochek’s system serve to provide a sense of the car’s status and condition, evaluating whether it is in a condition to be financed.
Following the examination, Autochek notifies all of the banks on its platform that the car is ready for financing and places it on the market. The banks respond with their offers after a thorough review.
After Autochek builds a credit profile, the end-user can choose from a pool of bank financing rates and apply to buy the car. The loan application procedure takes roughly 48 hours, compared to 40–45 days in the sector.
Autochek assists banks with disbursement and ensures that the vehicle is registered, insured, and tracked once it has been sorted. The car is then fed into Autochek’s after-sales network, where it is free-of-charge maintained anytime mechanical faults arise.
The company generates revenues through fees charged on consumer transactions and commissions paid by dealers and banks and service shops on the platform. Consumers can sign up and use the Autochek app for free.
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The company’s recent entrance into East Africa comes at a time when automotive technology businesses like as Moove, Planet42, and FlexClub are attracting investor interest as the demand for flexible vehicle finance continues to expand across the continent.
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Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning write