Home » Shekel Mobility, a B2B marketplace for auto dealers in Africa, raises $7M led by Ventures Platform and MaC VC.

Shekel Mobility, a B2B marketplace for auto dealers in Africa, raises $7M led by Ventures Platform and MaC VC.

by Alex Turner
Image Credits: Shekel Mobility

According to the World Economic Forum, the yearly demand for automobiles in Africa is around 2.4 million, while the demand for commercial vehicles is approximately 300,000.

This demand is growing due to a rise throughout the continent in the amount of discretionary money available, a robust expansion of the middle class, and rising urbanization. Even though most vehicles satisfying this demand are pre-owned, the rate of automobile ownership in Africa is significantly lower than the worldwide average of 203 cars per 1,000 people.

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Iterative approaches to corporate strategy foster collaborative thinking to further the overall value.
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In the past, we have covered new businesses in the automobile sector, shining a spotlight on essential players such as Autochek and Moove. Both companies address ownership by catering to customers and drivers, respectively. However, financing a car extends beyond the purview of customers and drivers; there is a significant possibility of offering services suited for dealerships. Small auto dealers rely heavily on vehicle finance since it facilitates their day-to-day business activities and helps them maintain lower operating expenses.

When interest rates on loans and credit cards are reasonable, consumers gain, which leads to an increase in the number of automobiles on the roads in Africa. This underscores the necessity for vehicle dealers to have access to inexpensive finance and business solutions.

In this strategic market, Shekel Mobility is a company that receives support from YC. The B2B auto dealer marketplace has raised over $7 million in investment, with over $4 million raised in loans and $3.2 million raised in equity. In an interview with TechCrunch, the company’s co-founder, Benjamen Oladokun, stated that the money would be necessary to quadruple the company’s current ARR, which is a little over $2 million, and that the company will leverage this momentum as it prepares for its next pricing round. The startup company announced in January of this year that it had received a pre-seed investment of $1.95 million, with participation from Y Combinator, Voltron Capital, and Zedcrest.

These investors participated in the subsequent seed round for Shekel Mobility. This time around, MaC Venture Capital and Ventures Platform took equal leadership roles in the seed round.

Y Combinator, Rebel Fund, Unpopular Ventures, Maiora Capital, PageOne Lab Inc., Phoenix Investment Club, Heirloom VC, Pioneer Ventures, and other angel investors are also among the company’s investors. During this time, Zedvance, VFD Microfinance Bank, Zenith Bank, and Fluna, amongst others, provided the debt component. According to Shekel Mobility, several financial institutions have leveraged the startup’s platform to fund automobile dealerships.

Together with Sanmi Olukanmi, Oladokun established Shekel Mobility. Shekel Mobility was founded on their combined expertise in the automotive business, which included the founding and subsequent sale of Eazypapers Technologies. Eazypapers Technologies was a digital vehicle documentation platform that catered to the FMCG, mobility, and logistics industries.

This so-called mobility fintech assists auto sellers in the African used car industry, estimated to be worth $30 billion, in finding, financing, and selling vehicles. Shekel Mobility seeks to establish itself as the leading platform to create and expand a vehicle dealership, locally or digitally, by 2025. More specifically, the company hopes to build the most significant auto dealership ecosystem possible, with yearly transactions totaling $10 billion by that year. Today, the auto dealer marketplace has been responsible for over $56 million in transactions. This has helped over 1,400 auto dealers expand their businesses by increasing the number of automobiles in their inventory and their sales across 7,000 vehicles.

Shekel Credit, the company’s main product, is the driving force behind the company’s expansion. This product gives car dealers instant access to finance, with credit limits that may go as high as $200,000 for purchasing a vehicle but more commonly range from $5,000 to $20,000. Shekel Credit is the company’s namesake. The financing system calls for the dealer to contribute thirty percent of the overall cost, which would equate to three thousand dollars in the example of a ten thousand dollar automobile purchase. Shekel lends the remaining 70 percent to the dealer as a loan. Subsequently, upon the sale of the vehicle to the end customer, which typically occurs within three months, the auto dealer sends money to Shekel to cover the interest on the loan and the transaction costs involved with the sale of the automobile.

Oladokun mentioned on the call that Shekel Mobility’s approach, which controls the whole process of purchasing and selling automobiles through dealerships, assures that it will record a 0% default rate. This model involves Shekel Mobility controlling the entire process. In a statement, Olukanmi further underlined that although there is a significant gap in directly giving financing to car dealers, Shekel Mobility only funds auto retailers that it “believes will have a lasting positive impact on consumers.”

Shekel Mobility is planning to expand its product offerings, one of which will be called Shekel Business. The company’s credit product has driven its success over the previous 20 months, and this expansion will build on that success. According to the company’s creators, this application will attempt to automate the informal trade activities inside the auto dealership sector. The suite of tools is intended to assist dealers not just in financing their inventory but also in expediting sales and structuring operations. This is in addition to helping dealers in the traditional sense of funding their stocks. “One of the fundamental things we’ve built is the ability to buy a car without collateral,” said Oladokun. “We got our start by making loans to dealers, but now we’re looking to cut the cost of owning car dealerships by providing additional digital tools and physical infrastructure.”

Kola Aina, founding partner at Ventures Platform, pointed out that Shekel is developing a significant market-creating invention that is key to increasing Nigeria’s automotive sector and will soon be essential to extending Africa’s automotive industry. Shekel Mobility can alter and spark the automotive sector in Africa, according to Marlon Nichols, founder and managing partner at MaC Venture Capital, who was commenting on the round. Shekel Mobility funds and empowers small enterprises that require funding to survive; thus, Nichols believes it can do both things. According to what he mentioned, “the team is enabling millions of dollars to move through the economy of Nigeria while at the same time providing locals with affordable automobiles.”

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