Nigerian startup Shekel Mobility has secured $7 million in seed investment from Ventures Platform and MaC VC.
Benjamindada.com reported that the B2B marketplace for auto dealers in Africa aims to revolutionize the industry by providing financing and a management system to dealerships.
Back in January, Shekel Mobility announced that it acquired $1.95 million in preseed money to reach its goal of building the biggest car dealership network and generating $10 billion by 2025.
“Our goal is to ensure that every auto dealer in Africa and other emerging markets can access the right kind of capital to maximize the opportunities available,” Benjamen Oladokun, who founded the platform with Sanmi Olukanmi in 2021, told Benjamindada.com.
Shekel Mobility is solving a massive problem in the auto dealership industry on the continent. Around Africa, almost 82% of car dealerships are small or medium in scale. Dealers are tasked with offering affordable prices for used cars, thanks to a lack of financing options for buyers. Contrary to other countries like Brazil, India, Indonesia and Malaysia, which have seen a significant amount of growth in the car dealership market, sub-Saharan Africa sees less than 2% of institutional credit going toward car purchases.
Enter Shekel Mobility: It supports finding, financing and selling cars within the used car markets.
“Auto dealers are the most critical stakeholders in the automobile value chain. Yet, they have been neglected up until now,” Olukanmi told Benjamindada.com.
Since launching two years ago, the startup has facilitated transactions that have raked in more than $56 million. It’s responsible for the growth of more than 1,400 dealerships, and it has achieved this by improving inventories and helping dealers sell thousands of cars.
“The team is enabling millions of dollars to move through the Nigerian economy and simultaneously providing locals with affordable automobiles,” Kola Aina, founding partner at Ventures Platform, said of Shekel Mobility.
Through the startup’s product, Shekel Credit, preapproved dealers have access to financing support when they buy vehicles. They must contribute to 30% of the vehicle’s value minimum in order for the startup to provide the rest of the funds. Once the car is bought, it is stored in a car lot approved by the startup. Shekel Mobility plans to open its own lots for storing cars in the next few months.
Shekel Mobility also supports dealers who are having a hard time selling the vehicle in the allotted timeframe. If that happens, the startup helps the dealer in selling it to a consumer or another dealer within its network.
“Due to our credit model, we have a 0% default rate,” Oladokun said. “This is because we do not just offer credit, but we have built an operating system for the dealers to run their transactions.”
With the $7 million, Shekel Mobility plans to launch Shekel Business, which will help evolve trading operations in auto dealerships around Africa.