Auto marketplace Autochek has raised $3.4 million to grow its Nigeria and Ghana markets and further invest in its technology and grow its local teams.
The pre-seed funding round was co-led by TLcom Capital and 4DX Ventures with inclusion from Golden Palm Investments, Lateral Capital, Kepple Africa Ventures, MSA Capital and a number of local angel/seed investors. The start-up will use the investment.
According to Etop Ikpe, Founder and CEO of Autochek, “This early-stage investment allows us to get started with the work of developing technology products and services that will transform automotive trade on the continent, whereby we significantly improve transactions and aftercare support for car owners, dealers and other stakeholders across the African automotive industry.
Through the acquisition of the Cheki Nigeria and Cheki Ghana, Autochek says it already has more than 20,000 unique vehicles listed on its platform, and more than 12,000 dealers and private sellers, as well as a range of corporate partners and customers.
Leveraging its extensive on-the-ground network of dealers and an experienced leadership team, Autocheck aims to address the pain points of buying, selling and repairing cars in Africa such as access to finance (for both consumers and dealers), maintenance and insurance, and bring greater value to car dealerships by enabling and enhancing automotive commerce across the continent.
Autochek will also facilitate cheaper and more effective transactions for dealers and corporate partners, leveraging its industry relationships to buy and sell vehicles on behalf of the customer for the best price and ensuring value for money.
“Autochek is radically improving customer experience and dealer economics in an industry that creates value and jobs across the continent and we are excited to be part of that journey. The founding team has a clear plan for what they want to achieve and we look forward to working with them as they execute on their vision,” said Andreata Muforo, partner at TLcom.
Car owners and potential owners will have access to loans, auctions, trade-ins and maintenance. Automotive dealers will have access to real time car auctions, fleet management, marketing support and standardised reports on car conditions and market value, as well as inventory management, CRM for lead management and garage management systems for car workshops. Financial institutions like banks and fintechs will also have access to a credit management dashboard that will make it easier for them to access customers.
Though we think this will be a very crowded platform and might be data-heavy and clunky for the end-user, Autochek says it’s building an ecosystem of solutions specifically designed to deliver an unrivalled customer experience for the African automotive market.
The team has solid experience in both markets and is well-positioned to scale quickly, as demand for reliable and well-priced cars on the continent grow. Ikpe’s experience in the tech business in Nigeria and across Africa made it easier for Autocheck to get the pre-seed round from seasoned strategic investors such as TLcom and 4DX Ventures.
Though there is so much hype about Autochek and Ikpe, the reality on the ground is that investors know that every business is a risk. It might pan out well or be a total failure in five years. Away from the hype or gloom, Ikpe is an experienced CEO, but scaling Autocheck into profitability is still a challenge he will have to face. Raising more rounds might not be a challenge with such a CV but the DealDey, Cars45 challenge might arise again. With all the cash, Cars45, the once-promising OLX Group venture Ikpe used to run is a shell of its former glory even though it’s fighting for a come-back.
In one of the interviews, Ikpe said his greatest weakness would be his impatience in strategy or process adoption within the company.
“Sometimes we see things very clearly and it seems very simple to implement, but when driving change across a lot of people, it takes time to actually get going and become a habit,” he told the publication adding that he has learned to include the adoption period into his implementation timeline.
Ikpe was previously a commercial director of Konga and formerly the CEO and co-MD of DealDey, which shut down operations in ugly circumstances. Cars45 also suffered a similar blow. Whether it was due to market conditions or corporate politics, there has been a leadership challenge in most of these ventures, which we can’t ignore especially with Cars45.
Walter Baddoo, Managing Partner at 4DX Ventures said, “We are proud to enter this partnership with Autochek as the company embarks on its mission to transform Africa’s automotive industry. By providing access to a new range of products and services, the company will dramatically enhance the automotive transacting experience for dealers and the ownership experience for consumers across the continent. Autochek is helping to unlock massive opportunities in Africa’s auto sector and we are pleased to be supporting that mission”.