Autochek Secures $13.1 Million Seed Funding To Scale Its Expansion

Autochek has secured $13.1 million in seed funding. The seed funding was co-led by follow-on investors, TLcom Capital and 4DX Ventures, the round also included participation from existing investors.

With the new funding secured just under a year after Autochek’s $3.4mn pre-seed raise, the round was preempted by Autochek’s lead investors – TLcom Capital and 4DX Ventures.

As part of Autochek’s growth strategy, the capital will be deployed to bolster its core auto loan processing platform and deepen its footprint in West Africa, starting with its recent entry into Cote d’Ivoire.

Additionally, the company is rapidly expanding its footprint across East Africa, following its recent acquisition of Cheki Kenya and Cheki Uganda, East Africa’s leading online auto marketplace.

As part of the investment by Mobility54, Autochek will be leveraging Toyota Tsusho’s vast retail network across 54 African countries to further deepen its expansion.

Launched in October 2020 and operational across East and West Africa in 5 countries – Nigeria, Kenya, Ghana, Uganda, and Cote d’Ivoire; Autochek combines technology, underpinned by data analytics to deepen auto finance penetration across the continent.

Powered by its residual value algorithm, Autochek has built in-house digital solutions such as Collateral Management, Dealer Management Systems, and a proprietary CRM system for managing stakeholder operations within the ecosystem such as vehicle financing, inspection, valuation, and inventory management.

Since its pre-seed raise in November 2020, the platform has achieved rapid traction across its business, most notably in the area of auto-financing where the number of processed loan applications rose from just 10 in November to over 46,000 to date.

Autochek has now partnered with 70 banks across the continent including leading regional players such as Access Bank, Ecobank, UBA, Bank of Africa, and NCBA Bank.

The startup has also achieved several key milestones since the start of the year including over 1000 dealers on the Autochek network actively using the loan processing solution, and over 15,000 certified and financeable vehicles on the Autochek marketplace across its markets.

Speaking on the next phase of Autochek’s rapid growth following its fundraise, Etop Ikpe, Founder and CEO of Autochek, said, “At Autochek, our driving force is to increase financing penetration on the continent; we have been amazed by the market adoption rate and the support from our banking partners in the countries we operate in. We stepped into this space knowing we were tackling one of the most significant challenges for Africa’s automotive sector – the lack of a simplified, digital-first financing process. By combining our expertise and networks, we have been able to make an impact in the automotive sector.

Andreata Muforo, Partner at TLcom, says “Autochek has achieved significant traction in one of Africa’s key verticals and is making impressive progress in bringing transparency and efficiency in this complex and fragmented industry. The foundation of its growth has been the strong leadership of its CEO, Etop Ikpe, a repeat founder in the automotive market whose world-class experience gave us the confidence to initially invest in Autochek in 2020. We look forward to the next chapter of Autochek’s growth as it continues to unlock the major upside which has remained dormant in Africa’s automotive sector for decades.”

Despite being a $45bn industry, Africa’s used car market only has a 5% financing penetration rate, marking a major contrast to the rates of 98% and 99% in Europe and the USA respectively. Due to a lack of transparency from the automotive sector, there is no way for lenders to understand the present and residual value of vehicles, creating a significant reluctance to issue loans.