Kenyan automotive marketplace Peach Cars recently announced a significant seed round of funding, securing a total of $5 million. This funding round was led by The University of Tokyo Edge Capital Partners (UTEC), a renowned venture capital firm based in Japan. Notable angel investors who participated in the round included Shintaro Yamada, founder and CEO of Mercari, Peter Kenevan, Vice President and Head of Japan at PayPal, and Hiroaki Ohta, a general partner at Japan’s Waseda University Ventures.

The primary intention behind this investment is to fuel the growth and expansion of Peach Cars’ business operations. The funds will be utilized to hire additional talent, enhance research and development (R&D) efforts, and further develop the company’s technological solutions. By expanding their team and investing in R&D, Peach Cars aims to solidify its position as a leading platform for democratizing car ownership in sub-Saharan Africa, starting with the Kenyan market.

Why The Investors Invested

The decision of the investors to commit such a substantial amount to Peach Cars can be attributed to several key factors. Firstly, the investors recognized the immense growth potential and market dominance that Peach Cars could achieve within the Kenyan automotive sector. The founders, Kaoru Kaganoi and Zachary Petroni, demonstrated a deep understanding of the challenges and opportunities present in the Kenyan used car market, which instilled confidence in the investors regarding the company’s prospects.

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Moreover, the investors were attracted to the startup’ strategic focus on leveraging technology and innovation. The founders’ commitment to enhancing the company’s technological solutions and investing in R&D showcased their dedication to delivering cutting-edge services. This commitment aligned with the investors’ belief in the importance of staying ahead in a rapidly evolving market.

The traction the startup has generated since launch also played a key factor. Since its launch, Peach Cars has experienced significant growth, with monthly gross merchandise volume (GMV) surpassing $200,000. The founders’ plan to establish a fully automated inspection center in 2024 demonstrates their commitment to continuous innovation and operational excellence.

Additionally, the investors recognized the founders’ customer-centric approach and their dedication to providing a transparent and delightful experience for users. This commitment to customer satisfaction differentiated Peach Cars from its competitors and positioned it as a leader in the market. The investors saw great potential in a company that aimed to address the existing challenges of price transparency, information asymmetry, fraud, and non-secure payments in the Kenyan used car market.

A Look at Peach Cars

Peach Cars was founded in 2020 by Kaoru Kaganoi and Zachary Petroni. The startup primarily operates in the Kenyan market, with plans to expand its reach in sub-Saharan Africa. The company’s core mission is to democratize car ownership in the region, providing a trusted and transparent platform for buying and selling used cars.

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The startup sets itself apart through its emphasis on customer education and experience. The founders identified a lack of price transparency and reliable information in existing second-hand marketplaces in Kenya. To address this, Peach Cars has developed a proprietary smart engine check device and software, enabling a comprehensive 225-point inspection of vehicles. This ensures accurate reports on the condition of the cars and enhances transparency for buyers.

In addition to facilitating transactions between sellers and buyers, Peach Cars generates revenue through service fees and commissions. The company also offers value-added services, including administrative work for transactions, inspections, change of ownership, secured payments, and handovers. By providing these additional services, Peach Cars aims to deliver a comprehensive car ownership experience for its customers.

The investment from UTEC and other angel investors not only provides financial support but also brings Japanese automotive expertise and networks to support Peach Cars’ growth. This strategic partnership enhances the startup’s potential for success and solidifies its position as a customer-centric, trusted, and technologically advanced platform for used car transactions in sub-Saharan Africa.

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Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert. 
As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard