Shekel Mobility secures $7M to drive vehicle financing in Africa

In January, the startup announced that it raised a $1.95 million pre-seed to pursue its ambition of building the largest Auto dealership ecosystem powering $10 billion by 2025. “Our goal is to ensure that every auto dealer in Africa and other emerging markets can access the right kind of capital to maximize the opportunities available,” says Benjamen Oladokun, who founded Shekel Mobility alongside Sanmi Olukanmi in 2021.

In the African car dealership market, nearly 82% consists of small and medium-scale dealerships. Many of these dealers struggle with offering affordable prices for used cars due to insufficient financing options. In contrast, emerging markets like Brazil, India, Indonesia, Malaysia, and large portions of Latin America typically see institutional credit comprising 65% to 70% of automotive transactions. However, in most areas of sub-Saharan Africa, this figure is less than 2%, according to Shekel Mobility.

While mobility fintech companies are emerging across the continent to address vehicle financing challenges, they primarily focus on established car dealers, who constitute only 18% of the car dealership market, or on individual consumers.

Shekel Mobility facilitates car dealers in discovering, financing, and selling cars within the African used car market. “Auto dealers are the most critical stakeholders in the automobile value chain. Yet, they have been neglected up until now,” Sanmi, co-founder and CEO at Shekel Mobility told Bendada.com.

Since its launch, the Y Combinator-backed startup has facilitated transactions exceeding $56 million. It has contributed to the expansion of more than 1,400 auto dealerships by enhancing their inventories and facilitating sales across 7,000 cars.

“The team is enabling millions of dollars to move through the Nigerian economy and simultaneously providing locals with affordable automobiles,” according to Kola Aina, the founding partner at Ventures Platform.

To obtain credit from the fintech via Shekel Credit, pre-approved dealers must contribute a minimum of 30% of the vehicle's value they plan to purchase. Shekel Mobility disburses the remaining 70% after thorough vetting and validation of the relevant documents. Once the vehicle is acquired, it is stored in an approved car lot. The company also has plans to establish its own car lot(s) in the coming months.

Additionally, the company offers support to dealers who struggle to meet the specified selling timeframe for the vehicle. In such cases, they assist the dealer in selling it either to a consumer or another dealer within the mobility fintech's dealers' network. “Due to our credit model, we have a 0% default rate,” Benjamen told Bendada.com. “This is because we do not just offer credit but we have built an operating system for the dealers to run their transactions.”

With this new funding, the startup will launch another product, Shekel Business to modernise the informal trading operations in the auto dealership sector.