Shekel Mobility, a smart fintech for auto dealerships, has raised $7 million in equity and loans.
Ventures Platform, Y Combinator, Rebel Fund, Unpopular Ventures, Maiora Capital, PageOne Lab Inc., Phoenix Investment Club, Heirloom VC, Pioneer Ventures, and other angel investors participated. Debt came from Zedvance, VFD Microfinance Bank, Zenith Bank, and Fluna.
The main office of Shekel Mobility is in Lagos, Nigeria. Y Combinator and Ventures Platform are two of the 14 partners in Shekel Mobility.
Co-founder Benjamen Oladokun said this funding will boost the company’s effect. He said the funding round helps African car sellers.
The World Economic Forum reports that Africa needs 2.4 million cars and 300,000 commercial vehicles due to rising disposable income, a growing middle class, and fast urbanisation.
Despite this desire, Africa has less than 45 automobiles per 1000 inhabitants, compared to 203 globally. Emerging firms like Autochek and Moove have addressed consumer and driver concerns, but Shekel Mobility addresses the expanding need for solutions for African automobile vendors.
Read also: African mobility Fintech, Moove secures $76 million for expansions
How it works
Shekel Credit drives the startup’s growth and funding. Auto sellers can get fast financing up to $200,000 for autos ranging from $5,000 to $20,000.
The dealer pays 30%, or $3,000, for a $10,000 automobile. Shekel lends the dealer 70%. The dealer pays Shekel back to the consumer for loan interest and transaction fees within three months of selling the car.
Shekel Mobility manages the entire car-buying and selling process through dealerships, ensuring a 0% default rate, Oladokun said on the call. While there’s a significant gap in lending directly to vehicle dealers, Olukanmi said Shekel Mobility exclusively finances retailers it “believes will have a lasting positive impact on the consumers.”
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Innovations at Shekel Mobility go beyond credit
Shekel Mobility plans to launch Shekel Business after 20 months of credit product growth. The founders say this new product will digitalise informal auto dealership dealing. This package of tools helps dealers finance stocks, optimize sales, and organise.
“One of the fundamental things we’ve built is the ability to buy a car without collateral,” Oladokun added. “We started lending to dealers, but now we want to provide digital tools and physical infrastructure to lower car dealership costs.”
Ventures Platform’s Kola Aina said that Shekel is working on a key, market-creating idea to help the automotive industry in Nigeria and, eventually, Africa grow. Similarly, Marlon Nichols, founder and managing partner at MaC Venture Capital, talked about the investment round and said that Shekel Mobility could change and grow Africa’s auto industry by giving small businesses essential funding and support.
“The team is making it possible for millions of dollars to flow through the Nigerian economy while also giving people in the country affordable cars,” he said.