Nigeria’s used vehicle sales portal Cars45.com has raised $5 million in series A round as Africa’s startup sector increases its appetite for cash.
The company has raised the money from Frontier Car Group, which is backed by several investors including Balderton Capital, EchoVC, TPG Growth, and NEA.
The company will use the money to improve its web platform on which it sells used cars.
“The used-car market in Nigeria is generally a big hassle. There’s so much mistrust, no vehicle history, and not much of a structured dealer network,” Cars45 CEO Etop Ikpe said.
Unlike many sites where the owner uploads the car and price. Cars45.com allows the saler to upload basic information but the schedules an inspection for the owner free of charge.
The company then carries out inspection on major areas such as breaks, engine, tyres etc and pays the owner within 45 minutes.
The company then showcases the vehicle to a network of subscribers who pay for the service of having to buy inspected cars.
The company is also considering charging car owners for the inspection service to increase its revenues going forward. Car sales market has been on the rise on the continent and given Nigeria’s population size the business gets a high number of buyers and sellers.
The startup boom is pulling money into the continent despite a recession in Nigeria and subdued growth elsewhere with incubation centres mushrooming all over the continent. Africa has more 340 tech hubs in 42 countries all of which are less than 4.5years old.