Buy & Sell Used Cars in Egypt | Sylndr - Financing & Service

Sylndr Secures $15.7 Million to Expand Automotive Services in Egypt

Sylndr, a Cairo-based company, has successfully raised $15.7 million in funding. This investment will facilitate the company’s expansion beyond its initial focus on online used car sales.

The company’s growth strategy encompasses auto financing solutions, vehicle servicing, and the development of tools specifically designed for automotive dealers.

Funding Details and Total Investment

Development Partners International’s Nclude Fund spearheaded the latest funding round. This round incorporates both new equity and previously undisclosed seed funding.

In addition to equity, Sylndr has secured approximately $10 million in debt financing from Egyptian banks over the past year. This brings the company’s total funding since its inception to over $30 million.

Notably, Sylndr previously completed a $12.6 million pre-seed round in 2022, marking the largest of its kind across the African continent.

From Used Car Marketplace to Mobility Platform

Founded in 2021 by Omar El Defrawy, a former executive from Elmenus, Sylndr initially concentrated on a direct-to-consumer model for used cars.

This involved purchasing used vehicles, meticulously refurbishing them, and then reselling them with a comprehensive warranty and a money-back guarantee.

The company has since broadened its scope to become a comprehensive mobility platform. It now offers digital auto loans, car servicing options, and a marketplace connecting customers with third-party dealers.

Market Opportunity in Egypt

“Our initial focus was solving a consumer problem related to car buying and selling,” stated El Defrawy, Sylndr’s CEO, in a recent interview. “However, as we scaled, it became apparent that the market presented a much larger opportunity.”

“Delivering value to customers necessitates building additional, integrated businesses,” he added.

Egypt currently has over 6 million vehicles on its roads, and demand for used cars is increasing. This growth is fueled by currency devaluation and the rising costs of importing new cars.

Addressing Market Inefficiencies

A 2021 government ban on used-car imports has shifted the market’s reliance entirely to domestic inventory, causing prices to fluctuate with exchange rates.

Currently, used cars in Egypt, which outnumber new vehicles by a ratio of 3:1, are predominantly sold through unregulated dealerships or online classifieds. These informal transactions often place a significant amount of risk on the buyer.

Sylndr aims to capitalize on these inefficiencies by formalizing processes related to vehicle inspections, establishing standardized pricing, providing digital financing options, and ensuring secure ownership transfers.

The company estimates the total addressable market at $10 billion.

Pricing and Growth Metrics

The average sale price on the Sylndr platform ranges between $20,000 and $25,000, according to El Defrawy.

Despite the significant devaluation of the Egyptian pound, this price point has remained stable in dollar terms over the last three years. This is due to the pricing of used cars mirroring that of dollar-pegged imported new vehicles.

While Sylndr has not disclosed specific revenue or transaction volume figures, the company reports a nearly tenfold increase in sales since 2022.

Revenue, measured in Egyptian pounds, has increased by a factor of 22 during this period. When adjusted for dollar fluctuations, the CEO claims a fivefold increase.

The Digital Transformation of Egypt's Automotive Market

Sylndr is strategically diversifying its business beyond direct car sales, expanding into three additional sectors to lessen its reliance on inventory holdings and capital expenditure.

One of these new ventures is Sylndr Swift, a digital platform facilitating automotive financing by connecting prospective buyers with banking institutions and underwriting services. According to El Defrawy, the platform is capable of delivering financing approvals in less than ten minutes. It’s important to note that Sylndr itself does not engage in direct lending.

Alongside Swift, Sylndr has launched Sylndr Plus, a comprehensive service offering vehicle inspections, routine maintenance, and servicing for vehicles purchased through the platform.

The third new vertical, Al-Ajans, functions as a marketplace connecting dealers directly with consumers. Sylndr manages crucial aspects of the transaction, including vehicle inspection, ownership transfer procedures, and payment processing.

An Integrated Automotive Ecosystem

Each of these services operates under a distinct brand identity, yet Sylndr has successfully integrated them into a unified mobile application. This creates a centralized hub for all car-related needs.

“Our aim is to provide customers with a seamless experience for buying, selling, financing, renting, and maintaining their vehicles, while simultaneously empowering dealers to operate more effectively and embrace digital transformation,” explains El Defrawy, a former investment banking professional.

Currently, the company’s revenue is equally distributed between direct-to-consumer sales and business-to-business transactions with dealerships. However, projections indicate that the financing and servicing verticals will account for as much as 60% of the company’s gross profit within the next two years.

Market Position and Competitive Landscape

Sylndr presently collaborates with over 1,000 dealerships across Egypt, serving both buyers and sellers through a combination of online and offline channels.

While other regional companies, such as Contactcars, OLX, and Nigeria’s Autochek (which entered the Egyptian market via AutoTager in 2023), offer comparable services, El Defrawy believes Sylndr distinguishes itself by providing a complete, end-to-end solution for both buyers and dealers throughout the entire automotive value chain.

The company’s established infrastructure – encompassing inspection processes, vehicle refurbishment capabilities, and strategic banking partnerships – presents a significant barrier to entry for potential competitors seeking to replicate its business model.

Focus on the Egyptian Market

Unlike some Egyptian startups that initially target the Gulf region for expansion, Sylndr is prioritizing a deeper penetration of the Egyptian market. The CEO asserts that Sylndr is currently the largest used car trading company in Egypt, measured by both transaction volume and overall value.

“Sylndr is constructing the digital infrastructure necessary to support mobility within a market historically challenged by limited access, a lack of trust, and difficulties in securing financing. Their integrated approach combines commerce, credit, and technology to significantly improve the car buying and selling experience for Egyptians,” states Ashley Lewis, Managing Partner at DPI Venture Capital.

Recent Investment and Funding

This investment represents the third announcement made by London-based venture capital firm DPI Venture Capital in the past month, following investments in MoneyFellows, a digital savings and credit platform, and Nawy, a proptech startup, both based in Egypt.

Additional venture capital firms participating in this funding round include Algebra Ventures, Nuwa Capital, Raed Ventures, Egyptian Gulf Holding, Uncovered Fund, Beltone Venture Capital, and Camel Ventures.