Egypt is home to one of Africa’s largest vehicle fleets, with over 6 million cars (80% are passenger cars) on its roads. According to this finding, most are used cars; their ratio to new vehicles is 3:1. But the used cars market isn’t only enormous in Egypt; it is in almost every country with a large population globally.
Recently, there’s been rapid digitization of this market, with several startups upending incumbents such as classifieds and hoping to define the new era of used-car-sale platforms. Some include U.K.’s Cazoo, India’s Cars24 and Spinny, Brazil’s InstaCarro and Mexico’s Kavak.
Cairo-based Sylndr is a new player in a market where unorganized dealers and classifieds dominate the sales volume. The automotive marketplace, which allows customers to sell and buy used cars, has raised a pre-seed round of $12.6 million–the largest of its kind in MENA and sub-Saharan Africa, besting what Rabbit, a 20-minute convenience delivery startup, pulled in last November.
Saudi-based early-stage venture capital firm RAED Ventures led the round. VC firms Algebra Ventures, Nuwa Capital, 1984 Ventures, and Global Founders Capital participated, with several regional and global angel investors taking part as well.
New cars are pricey; that’s one explanation for the massive demand for used vehicles, especially in emerging markets. In Egypt, popular brands such as GB Auto, Mansour Automotive, and Nissan are typically known to have good resale value. But the buying experience of such cars on classifieds can be underwhelming because of several issues such as lack of trust and affordability.
“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,” said co-founder and CEO Omar El Defrawy to TechCrunch in an interview. “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.”
Popular car models in Egypt cost about $15,000 on average. For many Egyptians, who earn less than that yearly, that’s a substantial amount to part with. And unlike in developed countries where systems are set in place to help people with vehicle financing, it is almost non-existent in developing markets such as Egypt, where only about 5% of used cars are financed.
“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.