Time to disrupt with Sylndr. There is a massive demand for used cars in almost every large population country and especially in emerging markets like Egypt. The reason is attributed to the fact that new vehicles are pricey, and average Africans can’t afford to own one. However, buying used cars on classifieds can be underwhelming because of several issues, such as a lack of trust between dealer and buyer.
Recently, the market is undergoing rapid digitization, with several startups upending incumbents like classifieds in the hopes of defining the next era of used-car-sale platforms. Cazoo in the United Kingdom, Cars24 and Spinny in India, InstaCarro in Brazil, and Kavak in Mexico are just a few examples.
Sylndr The New Player in Egypt’s Used Car Market
Sylndr is the latest player in Egypt’s used-car market, where unorganized dealers and classifieds dominate the sales volume. The Cairo-based automotive marketplace has recently raised a pre-seed round of $12.6 million — the largest of its kind in MENA and sub-Saharan Africa led by RAED Ventures, a Saudi-based early-stage venture capital firm.
“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. 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,” says co-founder and CEO Omar El Defrawy.
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With over 6 million cars on its road, Egypt has one of Africa’s most extensive vehicle fleets (80 percent are passenger cars). The ratio of old vehicles to new ones is 3:1, according to this finding. Popular car models cost around $15,000 on average. For many Egyptians who earn less than that yearly, that is a substantial sum to part with. And, unlike in developed countries, where systems are in place to assist individuals with vehicle financing, in developing markets such as Egypt, where only about 5% of used cars are financed, it is essentially non-existent.
“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,” El Defrawy added.
About Sylndr
Sylndr was founded in November 2021 by Omar El Defrawy with Amr Mazen. Though it is yet to launch to the public, its business model is tailored after India’s Cars24: Obtaining cars from individuals that want to sell, buying them up for an agreed price, reconditioning them, and then reselling them to new owners. The unique difference, according to the founders, is that Sylndr plans on providing a seven-day money-back guarantee, warranty, and flexible financing options to users.
Customers who want to sell their cars will be the first to benefit from the car retailer’s updates. Sylndr plans to open up to buyers in the fourth quarter of this year or the first quarter of 2023, according to Mazen.
Between these two events is the refurbishment of cars. A refurbished vehicle on Sylndr would’ve been slightly more expensive than non-refurbished cars listed on classified sites like OLX and Contactcars, based on these qualities. However, Sylndr’s CEO claimed that the company provided “fair and competitive pricing” and that consumers would still prefer to buy cars from Sylndr due to the apparent quality and speed of delivery.
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“It’s not a matter of prices being more; it’s a matter of paying for value. If you’re a consumer who doesn’t have any car experience, you’d want to buy something that gives you true value to the amount you’ve put in,” El Defrawy asserted. “Customers buy used cars and try to do the refurbishment independently, but no one has that kind of experience. That’s what we do, and of course, if they can find that car and execute this process in 24 hours, it becomes an even much nicer and better experience.”
Egypt’s Used Car Market Revenue Sources
Retail sales, auction houses, dealerships, and B2B sales are all options for the automotive startup to generate revenue. Sylndr may also explore supplementary revenue sources, including interest from financing, insurance, fees from roadside assistance, and other value-added services, according to El Defrawy. “We’re looking to develop that as we go,” he noted.
Omar A. Almajdouie, the managing partner at RAED Ventures, said that “The secondary car market is highly fragmented, and more often than not, consumers do not have a trusted counterpart.”
“The market is massive, ripe for disruption, and we’re excited to be part of Sylndr’s journey as they transform and set an entirely new standard for the used car market. Given the unique background and experience of this team, we believe in their ability to crack this business model.”
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The proceeds of the investment, according to the founders, will be used to scale the company’s operational capability, technology infrastructure, inventory growth, and build its retail and non-retail customer channels.
Sylndr stated that it plans to more than double its team size by the end of the year. Autochek, a Nigeria-based automotive platform that recently made advances into North Africa via an acquisition, seems would be a major competitor.
Other VCs that participated in the pre-seed round include Algebra Ventures, Nuwa Capital, 1984 Ventures, and Global Founders Capital, with several regional and global angel investors.
