When you create a good brand that is associated with quality, the brand goes before you in terms of popularity and visibility. That is natural. It is the reason millions of Facebook users around the world do not know the name, Mark Zuckerberg, though they make use of his creation almost on a minute-by-minute basis.
Back home in Nigeria, millions of mobile phone subscribers on Glo network enjoy the GSM provider’s services through making and receiving telephone calls, sending and receiving text messages, browsing on different social media and using it to transact various businesses that could be operated online, but cannot make any meaning of the name, Mike Adenuga.
The name, Cars45, has become synonymous with sale, buying and swapping of used and ‘tokunbo’ cars in Nigeria. You see the commercial on television, on billboards, on radio and on the social media. But you probably would not be able to associate the name, Etop Ikpe, with the company in the commercial you are thoroughly familiar with. That is to be expected.
Ikpe is the chief executive officer of Cars45, Nigeria’s biggest car auction service provider that has revolutionized buying and selling of used and ‘tokunbo’ cars in the country. The company is a Nigerian startup that helps car users to sell, buy and swap used cars with ease, free from the hassles that are usually associated with that category of cars in the country.
The company’s business since its establishment in 2016 has instilled confidence in an industry that had before now been characterized by uncertainties and risks that include buying a stolen car, or one that would become a liability to the buyer from the first day.
Now, you can dispose of your old car in a most transparent manner at the most appropriate price. You can buy a used car in the best condition that is commensurate with the price you are paying for it.
To anybody that watches the popular television commercial, it seems impracticable that a transaction for the sale of a used car could be completed in 45 minutes, with money safely deposited in the seller’s account. It also seems improbable that inspection of a used car to ascertain its true value could be done within the same period to give the buyer the required confidence that he is buying the car at the right price.
Ordinarily, both transactions are not what could be done in one day. It begins with inspection of the car by the potential buyer, usually accompanied by his trusted mechanic to ascertain the true condition of the car. For the buyer that wants to stay out of trouble, a background check is necessary to ensure the car is not stolen, that is, if it’s not being sold by a registered car dealer. The whole transaction may take up to three days, and would end with the seller going with the buyer to his bank to ensure the money is transferred before documents change hands.
Now, Cars45 has simplified the process. For anybody that is disposing of their used car, it’s as simple as driving the car to a Cars45 inspection centre and going back home without the car but with money safely deposited in the account under one hour.
“At Cars45, our passion is to build the infrastructure for commerce that allows sellers and buyers of Nigerian used cars to exchange value quickly, cheaply and with unhindered access to independent relevant information required for decision making”, Ikpe says of his company. “We have inspection centres in strategic locations to make it easy for our customers to sell their cars”.
Ikpe has used the company to uniquely create a market for Nigerians seeking to dispose of their cars. This market is different from the one operated by dealers of imported used cars, because it involves used, ‘tokunbo’ and even brand-new cars.
Buying and selling of cars simplified
The process of buying and selling a car at Cars45 is a simple one. The seller drives the car to any of the company’s inspection centres where it undergoes a comprehensive and methodical check, electronically, to determine its true state and right value. This is followed by a transparent online bidding process that involves thousands of dealers in different locations. The process is completed once there is a highest bidder, and in a jiffy, the seller receives alert on his phone and smiles home.
Ikpe says the business of Cars45 is focused on three key areas, namely, elimination of the friction usually associated with selling used cars; transparency and speed. “Through our proprietary pricing algorithm, we are able to standardize the prices associated with used cars”, he explains. “We run online auctions, which gives customers 100 per cent visibility into the price offers they receive for any car we inspect at our inspection locations”.
On the issue of speed, he says: “On average, it takes 30 to 40 days for consumers to sell their cars. We guarantee a price offer or cash in the bank, and in under an hour, once a customer visits anyone of our inspection locations”.
Ikpe describes the response to the company’s unique services as very positive. “Just like any great product solving a genuine problem, we’ve seen massive consumer adoption of our model and this justifies our rapid expansion”, he says. “We’ve so far conducted over 10, 000 inspections and auctions through our platform”.
The unique services that are associated with the business of Cars45 include transparent inspection, upfront pricing; fast, safe and easy sale, as well as immediate, on-the-spot sale. Others are the ease of selling a car in any condition and instant payment into the seller’s account.
Ikpe says Caers45 has set a new standard in the sale of used cars that has become the benchmark for selling used cars in the country. “You can now get your car inspected and sold at fair price within an hour through Cars45’s safe and hassle-free process”, he said. “Our nationwide network of purchase centres use an internally developed algorithm market intelligence and a professionally trained team to conduct inspections and valuations”.
The company has created the first of its kind platform for car dealers to conduct their business with ease and optimum security, using technology. “Cars45 also provides one of a kind platform for used cars in Nigeria, giving a private network of buyers the fastest way to find the perfect car that fits their buyers’ needs”, Ikpe said. “With an extensive variety of pre-inspected Cars45 certified used cars from across the country, we provide the safest market place for our partners”.
He listed Cars45 offers its customers as access to an inventory of certified cars, verified documents and paperwork, as well as simple car transfer and payment.
Involvement of FCG
A factor that has been central to the phenomenal success of Cars45 is its access to adequate funding. This has been made possible due to the company’s partnership with Frontier Car Group (FCG), a Berlin, Germany-based organization that invests in, develops, launches and operates markets for used cars in emerging markets around the world. The markets include Mexico, Chile, Turkey, Pakistan and Indonesia.
The FCG helped Cars45 to access funding to the tune of $5 million, with other partners such as Balderton Capital, EchoVC and TPG Growth. Ikpe says the capital injection will go into improving the company’s platform and also building other revenue streams for it.
“Our vision was to reinvent how the used automotive sales sector operated in global markets by engaging with the best local talent and companies to help create the right infrastructure in which we could build marketplace platforms”,
Sujay Tyle, the 25-year old chief executive officer of FCG, told Disrupt Africa. The company found a suitable and reliable partner in Cars45. He says Nigeria, through Cars45, is one of FCG’s biggest success stories around the world.
“FCG is essentially a brick and mortar company empowered by technology – we match this infrastructure with an online system and strategy which allows startups to flourish without wasting time with bureaucracy and inefficiencies, and that’s what we want to bring to the companies that we work with, in Nigeria and beyond”, he said. “You find that most governments want to encourage entrepreneurship, but are often hamstrung by the problem of displacing traditional businesses. You currently see this happening worldwide with Uber and local taxi companies. This means the relationships between startup ecosystems and governance are still quite nascent”.
Tyle said the challenging environment in which the sales sub-sector of the automotive industry operates in several countries necessitated establishment of an organization like FCG.
“The automotive sales sector has traditionally proved flawed in every country”, he said. “Despite growing consumer demand, there has been a lack of centralized, trustworthy marketplace for people to buy and sell cars efficiently for a competitive price. These challenges are amplified when combined with the issues and lack of resources of emerging markets. Frontier Car Group was born to solve and fix them”.
Ikpe says FCG has been crucial to the success of Cars45. He said the company adopted a detailed study of the market and found out that it has great potential that could be realized through excellent service delivery that could drive expansion. “To achieve this, we needed to ensure we were adequately funded, and this can be quite challenging for an African-based startup”, he said. “The funding has been absolutely vital to the success we have achieved so far”.
He spoke further: “Our strategy from day one was to ensure we had fluid information symmetry across the group. This enables us to learn and share best practices, and also identify scalable problem-solving solutions. We also have a concentrated number of people vastly experienced in scaling high growth ventures across any continent globally. With that sort of experience in place, we are able to recognize strategic opportunities and leverage global networks for hiring talent”.
Cars45 opens door for Africa
Tyle sees FCG’s financial investment in Cars45 as the beginning of future investments in Africa. For one, the success of the experiment with Cars45 will buoy the company into expanding into other African countries. He believes other investors will continue to invest their capital on the continent.
“Having watched Cars45 develop into one of our leading brands, we’re confident there are other emerging markets across Africa that could also become expansive marketplaces – largely thanks to the talented people already on the ground”, he said. “For us, it’s just about being able to identify the next potential success stories and strike up partnerships in those talent hotspots”.
He describes the future of the tech space in Nigeria as very exciting. “Young people are constantly adopting new technologies and more than capable of taking their know-how to new levels, with the right management and business structure”, he said.
“When you look at the latest $40 million Series C funding round raised by Andela – training developers across Nigeria, Kenya and Uganda – it’s clear to see that Pan-African tech ecosystems will fuel economic growth for the continent as a whole, especially when Western investors such as the Chan Zuckerberg Initiative are in on the ground floor”.
He said the experience of FCG in Africa has been that startups face challenges such as restrictive access to the right infrastructure and facilities, which he believes can hinder success on the continent.
Ikpe’s road to Cars45
Ikpe has always had a knack for business, even from his student days in the University of Lagos. His first business venture was during his final year as a student of Actuarial Science, when he ran a cinema in faraway Benin. Fridays were usually lecture-free, which would afford him the time to travel to the Edo State capital to run his cinema and return on Sunday for lectures on Monday.
Ikpe founded a startup called Three Stiches in 2008, which thrived for some time until he folded it up to join Dealdey, an online discount platform, as a co-managing director. He later joined Konga as director of marketplace operations in 2016. He left Konga the same year to set up Cars45, with Iyamu Mohammed, Tyle and Peter Lindholm as co-founders.
While climbing the business ladder, Ikpe has had to implement cost-cutting strategies during economically challenging times. Overcoming those challenges meant keeping his eyes permanently fixed on the ball to ensure the business decisions he took were devoid of interference of any kind.
He considers as his greatest achievement in the world of business the opportunity to provide direct and indirect employment to thousands of young people and seeing them develop economically and socially. “Contributing to the development of young people and creating job opportunities in Africa makes me most proud”, he said.
The Akwa Ibom State-born entrepreneur has an advice for those with sights on startups. “People should understand that every entrepreneurial journey is different and there is great value in starting from the bottom”.
Though a success story in the used car sales business, Ikpe sees automatic translation of languages between people – one that is devoid of physical devices – as one business he would like to go into, if he had the opportunity. “Communication is the greatest driver of human interaction”, he says. “If we could all understand each other, there is a greater chance of overall improved quality of human existence”.