Sylndr, a Cairo-based automotive marketplace that deals in the buying and selling of used cars has raised $12.6 million in a just concluded funding round led by RAED Ventures, with participation from Algebra Ventures, Nuwa Capital, 1984 Ventures, Global Founders Capital, and other prominent angel investors.
The company is the first to achieve such jawdropping feat of raising a pre-seed round of $12.6 million–the largest of its kind in MENA and sub-Saharan Africa in Egypt. The country is home to one of Africa’s largest vehicle fleets, with over 6 million cars (the majority being passenger cars) on its roads. According to this finding, a large number of these cars are used cars. Despite the ration of used cars to new cars in Egypt being 3:1, the used cars market still remains largely untapped.
There’s been a steady growth of digitization of this market, with several startups springing up to claim their place in the market such as Cazoo, India’s Cars24 and Spinny, Brazil’s InstaCarro, and Mexico’s Kavak. However, Sylndr is a new player in a market where unorganized dealers and classifieds dominate the sales volume.
During an interview with TechCrunch, the CEO Omar El Defrawy stated “The main problem that we’re trying to fix in Egypt is a complete mistrust between buyers and sellers of used cars in the markets. That’s the core problem that we’re trying to solve. Our vision as a company is that we want to quickly become the most trusted used car retailer in Egypt and the region.” He added that buying new cars in Egypt is pricey and that’s what has led to the high demand of used cars.
Popular brands such as GB Auto, Mansour Automotive, and Nissan are typically known to have good resale value in Egypt. Despite this, the buying experience of these cars on classifieds have not been palatable because of several issues such as lack of trust and affordability.
“So imagine if you enable financing and make the cars much more affordable to people, that’s a core value proposition we want to ship as well,” added El Defrawy, who founded Sylndr with Amr Mazen in November 2021.
According to the founders, they will provide a seven-day warranty connected with various long-term financing options to users. Sylndr plans to first launch to sellers and update its car listings, it would later open the platform for buyers in Q4 this year or Q1 2023.
The company’s expected price tag poses the argument of whether they will really solve the problem they set out to solve but the CEO asserts that they are offering value at only a slightly more expensive price than the classifieds. He says “It’s not a matter of prices being more; it’s a matter of paying for value. If you’re a consumer who doesn’t have any car experience, you’d want to buy something that gives you true value to the amount you’ve put in,”
He further stated “Customers buy used cars and try to do the refurbishment on their own, but no one has that kind of experience. That’s what we do, and of course, if they can find that car and execute this process in 24 hours, it becomes an even much nicer and better experience.”
The pre-revenue startup intends to make money from retail sales, auction houses, dealerships, and B2B sales. El Defrawy said Sylndr might also look into ancillary revenue streams such as interests from financing, insurance, fees from roadside assistance and other value added services. “We’re looking to develop that as we go,” he said.
In a statement, Sylndr said it is looking to more than double its team’s size by the end of the year. The company will face a neck-to-neck competition from the likes of Autochek, a Nigerian-based automotive platform that has recently made inroads into North Africa via an acquisition.
