Autochek, a Nigerian automotive technology startup, facilitating auto financing across Africa, has secured $13.1 million in seed funding. The new funding comes a month less a year after its $3.4 million pre-seed round, putting the total fund raised by the startup at $16.5 million.
The round was led by TLcom Capital and 4DX Ventures, with the participation from existing investors, Golden Palm Investments, Enza Capital, Lateral Capital as well as new participants, ASK Capital and Mobility 54 Investment SAS (the venture capital arm of Toyota Tsusho Corporation /CFAO Group).
Autocheck helps users to buy, sell and maintain their cars using their mobile app. As part of the company’s growth strategy, the newly raised fund will be used to expand its core auto loan processing platform and deepen its footprint in West Africa. The company has recently made an entry into Cote d’Ivoire, but hopes to expand its footprint across East Africa, following its recent acquisition of Cheki Kenya and Cheki Uganda, East Africa’s leading online auto marketplace. As part of the investment by Mobility54, Autochek will be leveraging Toyota Tsusho’s vast retail network across 54 African countries to further deepen its expansion.
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Founded in October 2020 and operational across East and West Africa in 5 countries – Nigeria, Kenya, Ghana, Uganda and Cote d’Ivoire; Autochek says it combines technology, underpinned by data analytics to deepen auto finance penetration across the continent. The company added that it has recorded rapid growth in just one year, having the number of processed loan applications rose from 10 to 46,000.
The success has been powered by its residual value algorithm, which enables in-house digital solutions such as Collateral Management, Dealer Management Systems and a proprietary CRM system for managing stakeholder operations within the ecosystem such as vehicle financing, inspection, valuation, and inventory management.
Autochek’s success has attracted partnership with 70 banks across the continent, including leading regional players such as Access Bank, Ecobank, UBA, Bank of Africa and NCBA Bank. Currently, the company says it has 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.
Speaking on the next phase of Autochek’s rapid growth following its fundraise, Etop Ikpe, Founder and CEO of Autochek, said the support of banking partners has helped the company in tackling the challenges it has encountered along the way.
“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,” he said.
Andreata Muforo, Partner at TLcom, says “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. We look forward to the next chapter of Autochek’s growth as it continues to unlock the major upside which has remained dormant in Africa’s automotive sector for decades.”
Despite being a $45bn industry, Africa’s used car market only has a 5% financing penetration rate, marking a major contrast to the rates of 98% and 99% 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. Based on its algorithms, Autochek is also able to develop a credit profile on behalf of customers and effectively reduce a loan application process from 40-45 days to 48 hours.
Walter Baddoo, Managing Partner at 4DX Ventures, says Autocheck is poised to build on its existing success to change Africa’s auto industry for good.
“Autochek is revolutionizing 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. We are excited to partner with the team as they pursue the next phase of their growth,” he said.
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