Autochek Acquires Cheki Kenya & Uganda - Expansion in East Africa

Autochek Expands East African Footprint with Cheki Kenya & Uganda Acquisition

Nigerian automotive technology firm, Autochek, has announced the acquisition of Cheki Kenya and Uganda from Ringier One Africa Media (ROAM). The financial terms of the transaction were not disclosed.

Deal Completion and Regional Expansion

The finalization of this acquisition is anticipated within the next few weeks. This move signifies Autochek’s successful entry into the East African market. It builds upon a previous acquisition completed approximately one year ago, encompassing Cheki’s operations in both Nigeria and Ghana.

Cheki’s History and Reach

Cheki initially launched in 2010 as an online platform for car listings, serving dealers, importers, and individual sellers in Kenya. From its headquarters in Nairobi, the company broadened its operations to include Nigeria, Ghana, Tanzania, Uganda, Zambia, and Zimbabwe.

ROAM’s Involvement and Current Operations

In 2017, Ringier One Africa Media (ROAM) acquired Cheki, integrating it into a network of online marketplaces and classifieds, including Jobberman. Currently, Cheki maintains operations in Tanzania, Zambia, and Zimbabwe, although activity in these markets is limited.

Strategic Importance of the Kenyan Market

Cheki Kenya represents a particularly significant market opportunity. The platform boasts a user base of 700,000 and lists over 12,000 vehicles each month. Furthermore, it has demonstrated substantial growth, with an 80% year-over-year increase in the last two years, making it a valuable addition to Autochek’s regional expansion strategy.

CEO Insights on the Acquisition

According to Autochek CEO Etop Ikpe, Cheki Kenya has consistently been a standout asset. He indicated to TechCrunch that while the Nigeria and Ghana acquisition wasn’t specifically designed to lead to this outcome, the opportunity was welcomed.

Vehicle Financing Penetration in East Africa

Kenya exhibits a higher rate of credit penetration for vehicle financing compared to Nigeria and Ghana. The East African nation has a 27.5% penetration rate, contrasted with just 5% across the entire West African market. This disparity underscores Autochek’s optimism regarding the East African market.

Prior to the acquisition, Autochek conducted a pilot program with several Kenyan banks – mirroring strategies employed in Ghana and Nigeria – to facilitate vehicle financing for consumers. This acquisition solidifies the company’s standing within the market, as stated by Ikpe.

Addressing Concerns of a Distress Sale

The rapid sale of Cheki operations across its primary markets has prompted questions regarding potential financial difficulties. However, CEO Ikpe refuted these claims.

He explained that the swift succession of acquisitions stemmed from a mutual understanding that the traditional classifieds model, utilized by Cheki, needed to evolve into a more contemporary, transactional approach – one championed by Autochek and other leading automotive companies in Africa. ROAM Africa viewed this as a necessary transition for Cheki.

Leveraging Past Relationships

Ikpe’s prior experience with Ringier, where he previously led DealDey, a classifieds deal company acquired by Ringier, facilitated the sale process. He conveyed to TechCrunch that ROAM Africa’s long-term strategy and confidence in Autochek’s business model were key factors.

“Finding the right home for the business and its employees” was also a significant consideration, Ikpe added.

ROAM CEO’s Perspective

Clemens Weitz, CEO of ROAM, stated, “We are witnessing a new phase in the evolution of digital automotive platforms globally, demanding specialized expertise. In Africa, we believe Autochek possesses the optimal team and capabilities to deliver a truly transformative consumer experience. This deal represents more than a successful transaction for ROAM Africa; it allows us to concentrate our efforts on our strategic priorities for other businesses.”

Growing Automotive Tech Landscape in Africa

Autochek’s expansion into East Africa coincides with increasing investor interest in automotive technology companies such as Moove, Planet42, and FlexClub, driven by the growing demand for flexible vehicle financing across the continent.

South Africa currently represents the most significant car financing market in Africa. Other automotive companies have established a presence there, and Autochek intends to expand into this market as well.

Future Plans and Funding

While South Africa boasts the highest vehicle financing penetration, Ikpe believes opportunities exist for Autochek to offer differentiated services tailored to the specific needs of the market. He emphasized the platform’s adaptability, allowing for both retail and B2B approaches.

“Our goal is to be present in every region. We’ve made inroads into East and West Africa, and we will continue to expand into North and South Africa,” Ikpe stated. Autochek is currently preparing for a funding round to support this expansion, potentially closing before the end of the year.