In a continent witnessing a surge in disposable income, robust middle-class growth, and rapid urbanization, the automotive industry in Africa is poised for a transformation. According to the World Economic Forum, the average annual demand for cars and commercial vehicles stands at a staggering 2.4 million and 300,000, respectively. Despite this demand, car ownership in Africa remains relatively low, with less than 45 cars per 1,000 people, a stark contrast to the global average of 203 cars per 1,000 people.
Startups Paving the Way
Acknowledging the need to bridge this gap, innovative startups are stepping into the spotlight. Notable players like Autochek and Moove have made waves by addressing the challenges faced by consumers and drivers in the automotive landscape. However, as the demand for vehicles continues to rise, a significant opportunity emerges on the dealer side of the equation.
Dealer-Centric Approach
Recognizing the importance of vehicle financing for small car dealers, Shekel Mobility, a B2B auto dealers marketplace, has become a key player in reshaping the automotive landscape in Africa. The startup, backed by Y Combinator and having secured over $7 million in funding, aims to empower dealers with affordable financing and business solutions.
Funding and Investors
Shekel Mobility’s journey is marked by significant support from various investors. Ventures Platform, Y Combinator, MaC Venture Capital, and others have contributed to the startup’s funding, with a total of $3.2 million in equity and over $4 million in debt. The funds are set to play a crucial role in quadrupling the startup’s current Annual Recurring Revenue (ARR) of slightly over $2 million.
Shekel Mobility’s Impact
Founded by Benjamen Oladokun and Sanmi Olukanmi, Shekel Mobility is carving a niche for itself by addressing the specific needs of auto dealers in Africa. The startup’s flagship product, Shekel Credit, offers immediate financing to dealers, with credit limits reaching up to $200,000 for vehicle purchases. This model requires a 30% contribution from the dealer, with the remaining 70% provided as a loan by Shekel Mobility.
Driving Growth Through Shekel Credit
At the core of Shekel Mobility’s growth is the Shekel Credit product, facilitating transactions and financing for dealers. The startup, with an end-to-end process of buying and selling cars through dealerships, boasts a remarkable 0% default rate. This success is attributed to the strategic control the platform exercises over the entire transaction process.
Table 2: Shekel Credit Transaction Model
| Stage | Dealer Action | Shekel Mobility Action |
|---|---|---|
| Purchase Request | Dealer initiates a purchase request for a vehicle, contributing 30% of the total cost. | Shekel Mobility provides the remaining 70% as a loan to the dealer. |
| Vehicle Sale to Customer | Upon the sale of the vehicle to the end customer (usually within three months), the dealer remits payment to Shekel Mobility. | Shekel Mobility receives payment covering interest on the loan and transaction fees. |
Setting the Stage for Growth
Having powered transactions worth over $56 million and facilitated the growth of over 1,400 auto dealers, Shekel Mobility is gearing up for the next phase of its journey. With the recently secured funding, the startup plans to introduce new offerings, including Shekel Business, a product designed to digitize informal trading processes within the auto dealership vertical.
Expanding Horizons with Shekel Business
Shekel Business aims to go beyond financing and contribute to the digital transformation of the auto dealership landscape. The suite of tools under Shekel Business is tailored to assist dealers not only in financing their inventories but also in streamlining sales and structuring processes. Benjamen Oladokun emphasized that one of the fundamental aspects they’ve built is the ability to buy a car without collateral, showcasing their commitment to reducing the cost of owning car dealerships.
Investor Confidence and Industry Impact
Investors, recognizing the potential impact of Shekel Mobility on Africa’s automotive industry, have shown confidence in the startup. Kola Aina, the founding partner at Ventures Platform, noted that Shekel is building a market-creating innovation crucial for expanding Nigeria and soon Africa’s automotive industry. Marlon Nichols, founder and managing partner at MaC Venture Capital, emphasized Shekel Mobility’s potential to transform and ignite the automotive industry in Africa by empowering small businesses with essential financing.
Looking Ahead: A Vision for 2025
Shekel Mobility has set an ambitious target for itself — to build the largest auto dealership ecosystem with transactions amounting to $10 billion annually by 2025. As the startup positions itself as a key player in Africa’s automotive landscape, the impact of its initiatives goes beyond monetary transactions, reaching into the heart of local economies and providing affordable automobiles to the population.
Conclusion
In conclusion, Shekel Mobility’s journey reflects the dynamic landscape of Africa’s automotive industry, where startups play a pivotal role in addressing challenges and unlocking opportunities. As the startup expands its offerings and continues to shape the future of auto dealership in Africa, the road ahead seems promising, with the potential to not only meet the growing demand for vehicles but also to contribute significantly to the economic growth of the continent.
This website uses cookies.
