Jiji, a Nigerian based online marketplace that provides buyers and sellers with an avenue to meet and exchange goods and services in Africa, has announced the acquisition of cars45, a transactional car marketplace for an undisclosed amount.
Before we dive into this news let’s talk about Cars45 which has been acquired different times under the last 3 years.
Cars45 is Nigeria’s largest car auction service provider and has been acquired at different times within the past three years. In 2017, Cars45 raised $5 million from Frontier Car Group (FCG), the Berlin-based company that builds used-car marketplaces focusing on emerging markets. This made FCG the largest shareholder and parent company in the Nigerian car business. In 2020, OLX Group, via its OLX Autos brand, acquired Cars45 from FCG. And now, JIJI is also acquiring cars45.This is not the first time Jiji and OLX have done business together. In 2019, the Naspers-owned online marketplace sold its assets in Nigeria, Ghana, Kenya, Tanzania and Uganda to Jiji.
Vladimir Mnogoletniy, co-founder and board member of Jiji noted that vehicle listing is the second most popular category on Jiji. According to TechCrunch, the category has over $3billion worth of listings out of the platform’s total listing exceeding $10 billion (real estate commands almost $7 billion).
The acquisition of Cars45 will help mitigate problematic trust and safety concerns that have sometimes plagued Jiji and offer a different car buying and selling experience via its transactional marketplace model. In turn, Cars45 users will benefit from Jiji’s dominance in online classifieds.
Regarding the integration of both platforms, Anton Volyansky cofounder and CEO of Jiji said:
“We will integrate this into one company because this acquisition has a lot of benefits for both. It’s a very common practice when marketplace and transactional business models work together as one project. For instance, a seller of a car, it’s convenient to sell both ways via a marketplace or auction model. So, it would be like a seamless process for selling the car.”
According to Jiji’s CFO, David Ojo, Cars45’s key value is its network of inspection centres where cars are inspected by more than 200 parameters. Unlike a classifieds marketplace where checks are inadequately carried out, transactional models employed by platforms like Cars45 ensure quality checks and detailed reports on a car’s condition with various databases.
What they are saying:
Anton Volyansky co-founder and CEO of Jiji believes the acquisition of Cars45 might be the first of many transactional marketplace acquisitions to set Jiji apart from other players.
He said, “In terms of classifieds, we’re looking at opportunities, but we are already a leader in Africa, so I think there’s very limited space for whom to acquire. However, we’re primarily interested in deals like Cars45, where we bring our leadership positions from classifieds and acquire very close business models that give us exposure to the transactional marketplace. So, for us, a major interest will be to acquire adjacent business models.”
Soumobroto Ganguly, CEO of Cars45, said “We are proud to have built a trusted buying and selling experience in autos. It makes sense to combine online and offline expertise. Merging with Jiji is aimed at creating a new kind of automotive retail experience for users in Africa. We are confident of jointly building an African Champion in the O2O Automotive Sector. Together we look forward to making transactions transparent and convenient for our customers, dealers, and franchisees across all our current and future markets.”