African Automotive Landscape: A Growing Demand
In a continent where the demand for cars and commercial vehicles is steadily rising, particularly due to increased disposable income, a burgeoning middle class, and rapid urbanization, the automotive industry is witnessing a transformation. The World Economic Forum notes that Africa has an annual demand for 2.4 million cars and 300,000 commercial vehicles. However, car ownership in Africa remains relatively low, with less than 45 cars per 1,000 people compared to the global average of 203 cars per 1,000 people.
Shekel Mobility: Bridging the Financing Gap for Dealers
While startups like Autochek and Moove have focused on consumers and drivers, YC-backed Shekel Mobility has carved its niche by addressing the critical aspect of vehicle financing for auto dealers. Recognizing the vital role small car dealers play in the industry, Shekel Mobility has positioned itself as a B2B auto dealers marketplace, offering tailored services to meet their unique financing needs.
Shekel Mobility recently announced a substantial funding milestone, securing over $7 million in funding. This includes $3.2 million in equity and over $4 million in debt. The startup plans to utilize these funds to quadruple its current Annual Recurring Revenue (ARR) of slightly over $2 million and prepare for its next significant funding round. This follows a successful pre-seed investment of $1.95 million in January, led by Ventures Platform, Y Combinator, Voltron Capital, and Zedcrest.
Diverse Investor Participation
Ventures Platform and MaC Venture Capital co-led Shekel Mobility's seed round, showcasing diverse investor participation. Other contributors include Y Combinator, Rebel Fund, Unpopular Ventures, Maiora Capital, PageOne Lab Inc., Phoenix Investment Club, Heirloom VC, Pioneer Ventures, and several angel investors. The debt component of the funding was provided by Zedvance, VFD Microfinance Bank, Zenith Bank, and Fluna, among others.
Founders' Vision and Expertise
Founded by Benjamen Oladokun and Sanmi Olukanmi, Shekel Mobility draws from their extensive experience in the automotive industry, including the successful launch and exit of Eazypapers Technologies. The startup aims to become the premier platform for launching and growing car dealerships, both locally and virtually. Their ambitious goal is to create the largest auto dealership ecosystem, with transactions amounting to $10 billion annually by 2025.
Shekel Credit and Future Offerings
At the core of Shekel Mobility's growth is its flagship product, Shekel Credit. This innovative offering provides auto dealers immediate access to financing, offering credit limits up to $200,000 for vehicle purchases. The financing model involves the dealer contributing 30% of the total cost, with Shekel providing the remaining 70% as a loan. The startup meticulously manages the end-to-end process, ensuring a 0% default rate. Buoyed by the success of Shekel Credit, the startup plans to introduce additional offerings, including Shekel Business, designed to digitize informal trading processes within the auto dealership vertical.
Market Impact and Investor Perspectives
Investors, including Ventures Platform and MaC Venture Capital, recognize Shekel Mobility as a market-creating innovation crucial to expanding Nigeria and Africa's automotive industry. The startup's transformative potential in financing and empowering small businesses aligns with its mission to enable millions of dollars to flow through the economy while providing affordable automobiles to locals.