The University of Tokyo Edge Capital Partners (UTEC) and other angel investors, such as Shintaro Yamada (founder and CEO of Mercari), Peter Kenevan (VP, Head of Japan at PayPal), and Hiroaki Ohta (general partner at Waseda University Ventures), led the $5 million seed round for Kenyan auto marketplace Peach Cars.
According to a statement, the startup, which Kaoru Kaganoi and Zachary Petroni founded in 2020 to increase access to car ownership in sub-Saharan Africa, starting with Kenya, will use the funds to expand the company, hire more employees, and invest more in research and development as it grows its tech solutions.
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Kenyan used-car markets
Peach Cars’ founders said they saw an opportunity in Kenya’s used automobile market after living in sub-Saharan Africa for over a decade and talking to friends and industry peers. CEO Kaganoi said Kenya lacked reliable used-goods markets. Existing ones featured fraud, insecure payments, a lack of understanding, and poor client experiences.
“It was hard for me to find cheap used furniture and electronics when I moved to Kenya,” the CEO added. “It was also hard for me to find good cars because there aren’t any set of inspection methods or service providers, and you have to know a good mechanic yourself to do your own quality checks.”
Peach Cars’ creators considered many factors before releasing it. Build markets by examining market potential and unit economics. Plan activities. Peach Cars had to pursue Kenya’s commission-based high-value asset categories. Both owners were SafeBoda drivers, which helped.
Kaganoi also noted in the interview that Africans live in a “satchetized” economy and buy small goods without thinking about the process or impacts, but spending a minute in a mall in Africa indicates that people care about the experience. “The idea is, why can’t we give everyone who buys a car, whether it costs $4,000 or $40,000, the same pleasant experience?” stated the CEO.
Kaganoi also claimed that Africa’s young population and increasing middle class don’t have close relationships with car technicians and want safe, easy-to-use services. Peach Cars makes Kenyan car ownership easier and more exciting.
A smart engine check device and Peach’s software automate car inspections. Because 80% of automobiles in Kenya are Japanese, the 225-point inspection approach provides a complete and accurate report on all vehicle systems.
Peach Cars imitate Autochek and Moove
Autochek and Moove, two larger African mobility businesses, sell and repair automobiles like Peach Automobiles. Peach is a C2C marketplace like Jiji, whereas Autochek and Moove handle and finance assets. Petroni prefers Peach over Jiji because it teaches people about auto ownership, offers faster ways to find items, handles transactions and payments better, and, most significantly, maintains and fixes cars.
The COO said Peach’s car care service matches clients’ needs because they desire honest and open treatment. “Peach can improve vehicle diagnosis and repair using inspection methods and data.”
The vehicle marketplace receives service fees and commissions after a transaction. Agreements, checks, ownership transitions, secured payments, and handovers generate revenue. Peach’s proprietors say they’ve sold “hundreds of cars” and will create a virtually fully automated inspection centre in 2024. Peach generates over $200,000 in gross merchandise volume (GMV) each month, 10 times more than two years ago.
Kiran Mysore, Principal at UTEC, said, “Peach is creating the most customer-centric, trustworthy, and advanced used-car platform in Sub-Saharan Africa by combining their operational excellence with smart IoT devices and data analysis.” “UTEC is proud to work with Peach and encourage collaboration between Japan and Africa by adding the automotive expertise and network of Japan.”