Frontier Car Group, the parent company of Cars45 has raised $400 million funds from Prosus classified business, OLX Group. The fund will be used to scale Frontier Car Group’s business and launch it into a new marketplace.
Frontier Car Group (FCG) began business operations in 2016, operating a used automotive marketplace within the emerging economies of Nigeria, Mexico, Chile, Pakistan, and Indonesia.
The platform enables the on-demand purchase and sales of cars via its mobile application for users who want to order and pay for cars.
FCG operates its business in Africa under the auspices of Cars45 which has a huge market share of car purchase and sales in Kenya and Nigeria.
The $400 million is a primary injection of funds into Frontier Car Group from OLX’s joint ventures in India and Poland. The fund also includes minor funds invested by founders, investors and the management of OLX.
When evaluated, the new investment in Frontiers Car Group currently makes OLX Group, the largest shareholder while the market valuation FCG becomes $700 million. The valuation will also make FCG vie for one of the top 5 automotive positions and control the Africa market.
The investment will also prompt OLX leaving the automotive market in Africa to Car45 who will now operate as the automotive market place in the continent.
The CEO of OLX Group, Martin Scheepbouwer has lauded the investment. He noted that the company will build a globally used car marketplace, offer premium and convenient service to millions of car buyers and dealers globally.
The brokered investment will also benefit dealers and offer an improved intelligence dealership management system that will provide new pricing data via CarFax and Blue Book style products. On the other hand, it will also provide a transparent platform for selling used cars to sellers.
It is pertinent to state that OLX had previously invested $89M in Frontiers Car Group. With the acquisition of the $400million fund, Frontier Car Group will expand businesses into rising markets.
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