The World Economic Forum reports that Africa’s annual demand for cars and commercial vehicles is 2.4 million and 300,000, respectively. This demand is rising due to increased disposable income, a growing middle class, and rapid urbanization continent-wide. Despite the demand, car ownership in Africa is less than 45 cars per 1000 people, contrasting with the global average of 203 cars per 1000 people.
Shekel Mobility
We’ve highlighted startups like Autochek and Moove in the automotive industry, focusing on consumers and drivers. However, there’s a significant opportunity to provide tailored services for dealers. Vehicle financing is vital for small dealers, aiding daily transactions and cost management. Affordable credit benefits customers, leading to more cars on African roads. This underscores the need for accessible financing and business solutions for dealers.
In this strategic domain, YC-backed Shekel Mobility operates as a B2B auto dealers marketplace. With over $7 million in funding, including $3.2 million in equity and over $4 million in debt, the startup aims to quadruple its current ARR of slightly over $2 million. Co-founder Benjamen Oladokun mentioned that these funds will support the startup’s growth as it prepares for its next funding round.
Shekel Mobility Pioneering Auto Dealership Transformation
Shekel Mobility, founded by Oladokun and Sanmi Olukanmi, leverages their automotive industry expertise. The startup aims to become the premier platform for launching and growing car dealerships, aspiring to reach transactions totaling $10 billion annually by 2025. Their flagship product, Shekel Credit, provides dealers with immediate financing, with credit limits up to $200,000. The financing involves the dealer contributing 30% of the total cost, with Shekel providing the remaining 70% as a loan. Upon selling the vehicle, the dealer remits payments to cover the loan and transaction fees. To date, Shekel Mobility has facilitated transactions worth over $56 million, benefiting over 1,400 dealers and 7,000 cars.
Shekel Mobility manages the complete process of buying and selling cars through dealerships, ensuring a 0% default rate, as mentioned by Oladokun. Olukanmi, in a statement, emphasized that although there’s a significant gap in offering direct financing to auto dealers, Shekel Mobility only finances those it “believes will have a lasting positive impact on the consumers.”
Shekel Mobility, having experienced growth in the last 20 months through its credit product, plans to introduce additional offerings, such as Shekel Business. According to the founders, this product aims to digitize informal trading processes in the auto dealership vertical. The suite of tools is crafted to assist dealers not only in financing their inventories but also in streamlining sales and structuring processes. Oladokun stated, “We’ve built the ability to buy a car without collateral,” emphasizing their shift from lending to dealers towards providing digital tools and physical infrastructure to reduce the cost of owning car dealerships.
Kola Aina, the founding partner at Ventures Platform, highlighted that Shekel is creating a crucial market innovation to expand Nigeria and soon Africa’s automotive industry. Marlon Nichols, founder and managing partner at MaC Venture Capital, expressed that Shekel Mobility has the potential to transform and ignite the African automotive industry by financing and empowering small businesses. He noted, “The team is enabling millions of dollars to move through the Nigerian economy and simultaneously providing locals with affordable automobiles.”
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