The African car market has one of the highest growth prospects in the world with a current capitalization of about $35 billion and expected increase to about $45 billion by 2027. In this multi-billion dollar market, used cars dealerships are taking a larger share.
Spurred by rising investors’ interest, countries like Nigeria and Egypt with huge markets are grabbing the lion’s share with established used cars companies like Cars45 and Jiji. However, startups using digital strategies are revving up the competition with lucrative fund-raising from investors around the world.
Egypt’s online used-car retailer Sylndr has raised $12.6M for its pre-seed round led by RAED Ventures, with participation from Algebra Ventures, Nuwa Capital, 1984 Ventures, Global Founders Capital, and a number of prominent regional and global angel investors. The pre-seed round is the largest of its kind in MENA and sub-Saharan Africa.
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Sylndr is set to build trust in the used-car market by providing customers with a hassle-free experience to buy, sell and finance their cars transparently and reliably.
Sylndr, which was founded by Omar El Defrawy and Amr Mazen, prides itself on its “driving engine”; a strong team of 40+ highly experienced individuals keen on making a positive impact on the lives of many. The company is looking to more than double the size of the team by the end of year.
“We aim to become the most trusted used cars retailer in the region. Our customers will be able to sell their cars directly in as little as 24 hours, with free collection and fast payment.” Omar El Defrawy, Sylndr’s Chief Executive Officer, said.
“Sylndr will be the go-to place for customers seeking affordable cars, featuring an extensive range of high-quality used vehicles accessible through a diverse set of financing solutions.
“We are privileged to have earned the trust of such a distinct group of regional and global investors; a testament to the immense potential of the opportunity, and the breadth of our founding team.
“If we do our job right, our impact will be felt by so many Egyptians across different market segments, as we empower them to own their dream cars,” he said.
The capital raised will be allocated to building Sylndr’s operational capabilities, technology infrastructure, brand awareness and – most importantly – developing a superstar team able to actualize the company’s ambitious vision.
One of the obstacles to the used cars market’s growth that Sylndr is trying to solve is lack of trust. With the rate of risks involved in buying a reliable used vehicle, investors are backing the startup to build a company that consumers can count on.
“The secondary car market is highly fragmented and more often than not, consumers do not have a trusted counterpart,” Omar A. Almajdouie, Managing Partner at RAED Ventures said. “The market is massive, ripe for disruption and we’re excited to be part of Sylndr’s journey as they transform and set an entirely new standard for the used car market. Given the unique background and experience of this team, we believe in their ability to crack this business model.”
Popular car models in Egypt cost about $15,000 on average, posing a huge challenge to car ownership as only about 5% is financed.
Per TechCruch, Sylndr is yet to launch to the public. However, it is tailoring its model after India’s Cars24: Obtaining cars from individuals that want to sell, buying them up for an agreed price, reconditioning them and then reselling them to new owners.
The founders said Sylndr also plans on providing seven-day money back guarantee, warranty and flexible financing options to users. Mazen said Sylndr plans to open up to buyers in Q4 this year or Q1 2023. But the car retailer will first update its car listings by launching to customers who want to sell their cars.