Prosus classifieds unit OLX invests $400m in Frontier Car Group

Old cars. Photo: Alex Suprun

Prosus classifieds unit OLX Group will invest up to $400 million in Berlin-headquartered used car trading platform Frontier Car Group (FCG) and combine their operations across emerging markets.

In 2018 OLX’s venture arm invested $89 million in FCG, a start-up co-founded in 2016 by 26-year-old American CEO Sujay Tyle with emerging market specialist Peter Lindholm and chief technology officer Andre Kussmann.

That helped FCG expand from four markets to 10: Argentina, Chile, Colombia, India, Indonesia, Mexico, Nigeria, Pakistan, Poland and the United States.

“They have blown all my expectations out of the water,” OLX Group CEO Martin Scheepbouwer told Reuters. “So I said to Sujay, what more can we do?”

OLX will inject capital in exchange for new shares and a tender offer to buy out existing shareholders. The partners will also fold in their joint ventures in India and Poland.

It’s not clear what stake OLX will hold after its investment but it expects to be the largest shareholder.

BUSINESS MODEL

FCG’s approach is similar to that of another Berlin start-up, AUTO1, which is backed by Japan’s Softbank Group .

FCG allows sellers to request a quick online valuation before bringing their car in to an inspection centre for an estimate that serves as the basis for an on-the-spot sale to a dealer or private buyer.

“That provides a superior experience for many people, especially in emerging markets where there’s a lack of transparency, a lack of trust and a lack of infrastructure,” Scheepbouwer said in an interview.

FCG employs 1,700 people and runs 500 inspection centres. The company has turned over $700 million in the past 12 months, tripling its revenue.

Tyle said FCG is “very much about how we can be the most trustworthy,” something that is especially important in countries where doing cash deals can be a dangerous undertaking.

Amsterdam-listed Prosus was spun out of South African Internet giant Naspers and holds a stake in Chinese tech giant Tencent.

Reuters

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.