The World Economic Forum reports that Africa currently has a yearly demand for 2.4 million cars and 300,000 commercial vehicles. This demand is on the rise due to increased disposable income, a growing middle class, and rapid urbanization across the continent. Despite this demand, car ownership in Africa remains below the global average, with less than 45 cars per 1,000 people compared to the worldwide average of 203 cars per 1,000 people.
In our previous discussions, we highlighted startups in the automotive industry, such as Autochek and Moove, which focus on consumer and driver services to address the ownership landscape. However, there’s a significant opportunity beyond individual consumers and drivers – providing tailored services for car dealers. Vehicle financing plays a vital role for small car dealers, aiding them in daily transactions and cost management. Affordable credit not only benefits dealers but also customers, contributing to increased car ownership in Africa. This underscores the necessity for accessible financing and business solutions for car dealers.
Shekel Mobility, backed by Y Combinator, operates in this strategic domain. This B2B auto dealers marketplace has secured over $7 million in funding, with $3.2 million in equity and over $4 million in debt. Co-founder Benjamen Oladokun revealed in an interview with TechCrunch that these funds will play a crucial role in quadrupling the startup’s current Annual Recurring Revenue (ARR) of slightly over $2 million. Shekel Mobility aims to leverage this momentum as it prepares for its next funding round. Earlier this year, the startup announced a $1.95 million pre-seed investment led by Ventures Platform, with participation from Y Combinator, Voltron Capital, and Zedcrest.
Investors from the seed round, including Ventures Platform and MaC Venture Capital, have continued their support in Shekel Mobility’s latest funding. 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. Notably, Zedvance, VFD Microfinance Bank, Zenith Bank, and Fluna, among others, have provided the debt component. Some of these entities have utilized Shekel Mobility’s platform to finance auto dealerships.
Shekel Mobility was founded by Benjamen Oladokun and Sanmi Olukanmi, bringing their collective expertise in the automotive industry, including the launch and exit of Eazypapers Technologies. This digital platform focused on vehicle documentation for Fast-Moving Consumer Goods (FMCG), mobility, and logistics companies, serving as the foundation for Shekel Mobility.
Positioning itself as a mobility fintech, Shekel Mobility assists car dealers in navigating the $30 billion African used car market. The startup aspires to become the premier platform for launching and growing car dealerships, both locally and virtually. Their goal is to build the largest auto dealership ecosystem, with transactions totaling $10 billion annually by 2025. Shekel Mobility has facilitated over $56 million worth of transactions, contributing to the growth of more than 1,400 auto dealers and impacting 7,000 cars.
At the core of Shekel Mobility’s growth is its flagship product, Shekel Credit. This offering provides auto dealers with immediate financing, offering credit limits up to $200,000 for vehicle purchases, typically falling within the $5,000 to $20,000 range. The financing model involves the dealer contributing 30% of the total cost, with Shekel providing the remaining 70% as a loan. The dealer repays the loan, covering interest and transaction fees, upon selling the vehicle to the end customer within a three-month timeframe. This end-to-end process, where Shekel Mobility controls buying and selling through dealerships, ensures a 0% default rate.
Building on its credit product’s success in the last 20 months, Shekel Mobility plans to introduce more offerings, including Shekel Business. This product aims to digitize informal trading processes within the auto dealership vertical, providing tools to assist dealers not only in financing their inventories but also in streamlining sales and structuring processes. Co-founder Benjamen Oladokun emphasizes their commitment to reducing the cost of owning car dealerships, stating, “We started out lending to dealers, but now we’re looking to provide additional digital tools and physical infrastructure.”
Kola Aina, founding partner at Ventures Platform, recognizes Shekel’s role in creating a market and expanding Nigeria and Africa’s automotive industry. Marlon Nichols, founder and managing partner at MaC Venture Capital, sees Shekel Mobility as a transformative force in Africa’s automotive industry, empowering small businesses with necessary financing. Nichols notes that the team is facilitating significant economic movement in Nigeria while providing affordable automobiles to locals.
