World Economic Forum States Africa has an average annual demand for 2.4 million cars and 300,000 commercial vehicles. This demand is increasing due to the increase in disposable income across the continent, strong growth of the middle class, and rapid urbanization. But while most cars that meet this demand are used, car ownership in Africa is underutilized Less than 45 cars per 1,000 peopleThis is in contrast to the global average of 203 cars per 1,000 people.
We’ve featured startups in the auto industry, highlighting notable players like Autochek and Moove, both of which address ownership by serving consumers and drivers, respectively. However, vehicle financing extends beyond consumers and drivers; There is a huge opportunity to provide tailored services to merchants. Vehicle financing is crucial for small car dealers because it helps them with day-to-day transactions and reduces costs. When credit is affordable, it also benefits customers, resulting in more cars on the road in Africa. This highlights the need for affordable financing and business solutions for car dealers.
Work within this strategic area is supported by YC Navigation in NIS. The B2B auto dealer marketplace has raised more than $7 million in funding, including $3.2 million in equity and more than $4 million in debt. Founding partner Benjamin Oladokun He shared in an interview with TechCrunch that the funds will be instrumental in quadrupling the startup’s current ARR of just over $2 million and capitalizing on that momentum as it prepares for its next price round. Just last January, the startup announced a $1.95 million seed investment led by Ventures Platform with participation from Y Combinator, Voltron Capital, and Zedcrest.
These investors followed Shekel Mobility’s seed round. This time, Ventures Platform co-led its seed round alongside MaC Venture Capital. Other investors include Y Combinator, Rebel Fund, Unpopular Ventures, Maiora Capital, PageOne Lab Inc., Phoenix Investment Club, Heirloom VC, Pioneer Ventures, and other angel investors. Meanwhile, Zedvance, VFD Microfinance Bank, Zenith Bank, Fluna, among others, provided the debt component; Some have leveraged Shekel Mobility’s platform to finance car dealerships, according to the startup.
Oladokun founded Shekel Mobility with Sanmi Olukanmi. Their combined experience in the automotive industry, including the launch and exit of Eazypapers Technologies, a digital vehicle documentation platform catering to fast-moving consumer goods companies and transportation and logistics companies, laid the foundation for Shekel Mobility.
The self-described mobility fintech helps car dealers find, finance and sell cars in the $30 billion African used car market. Shekel Mobility aspires to position itself as a leading platform for launching and growing a car dealership locally or virtually (it wants to build the largest car dealership ecosystem with transactions reaching $10 billion annually by 2025). To date, the auto dealer marketplace has supported over $56 million in transactions, facilitating the growth of over 1,400 auto dealers by increasing their inventories and sales across 7,000 vehicles.
At the heart of the startup’s growth is its flagship product, Shekel Credit, which provides car dealers with instant access to financing, with credit limits of up to $200,000 for car purchases, which typically fall within the $5,000 to $20,000 range. The financing mechanism involves the dealer contributing 30% of the total cost, which amounts to $3,000 in the case of a $10,000 car purchase. The NIS provides the remaining 70% as a loan to the merchant. Then, when the car is sold to the end customer, usually within a three-month time frame, the car dealer converts the payment into shekels, covering the interest on the loan and transaction fees associated with the sale of the car.
Oladokun noted on the call that this model, where Shekel Mobility controls the end-to-end process of buying and selling cars through dealerships, ensures a record default rate of 0%. Olukanmi, in a statement, also stressed that while there is a huge gap in providing financing directly to car dealers, Shekel Mobility only funds car dealers that it “believes will have a lasting positive impact on consumers.”
Building on its growth over the past 20 months with its credit product, Shekel Mobility is set to introduce further offerings, including NIS works. The founders say this product will seek to digitize informal trading processes within the car dealership sector. The toolkit is designed to help merchants not only finance their inventory but also streamline their sales and structuring processes. “One of the key things we’ve built in is the ability to buy a car without warranties,” Oladokun said. “We started out lending to dealers, but now we are looking to provide additional digital tools and physical infrastructure to reduce the cost of owning car dealerships.”
The shekel is as well, noted Kula Aina, co-founder of Ventures Platform Building innovation is critical to market creation which is important for the expansion of Nigeria and soon the automotive industry in Africa. In the same way, Speaking at the round, Marlon Nichols, Founder and Managing Partner at MaC Venture Capital, said Shekel Mobility has the potential to transform and ignite the automotive industry in Africa because it funds and empowers small businesses that need financing to survive. “The team is working to enable millions of dollars to move through the Nigerian economy while at the same time providing local residents with affordable cars,” he noted.