FCG to Take on the Global Used Car Market as OLX Group Invests $400 Million in the Auto-Marketplace Company
In a strategic move, OLX Group has invested US$400 million in Frontier Cars Group (FCG) to increase the strength and reach of its operations.
OLX is backed by South African media group, Naspers, while FCG is a Berlin-based company founded by 26-year old CEO, Sujay Tyle.
Recently, FCG made an investment in Nigeria’s Cars45 to aid its rapid expansion and excellent service delivery.
The OLX-FCG investment
OLX promotes the trading of used cars on its online platform through the use of classified ads. FCG does something similar on a grander scale by investing in, developing, launching and operating used automotive marketplaces.
The decision to invest $400 million in FCG is a recognition of the potential of the auto-marketplace company.
Reuters reported that according to CEO of OLX, Martin Scheepbouwer, the performance of FCG had outweighed his expectations of the company.
“They have blown all my expectations out of the water, so I said to Sujay, what more can we do?”Martin Scheepbouwer, CEO of OLX Group
With the funding received by FCG, the company is in a stronger position to engage more local talents and companies in creating the right infrastructures that will build marketplace platforms.
FCG can further expand its reach which has been to build centralised and trustworthy marketplaces for people to buy and sell cars more efficiently and at competitive prices.
“The automotive sales sector has traditionally proved flawed in every country. Despite growing consumer demand, there has been a lack of a centralised, trustworthy marketplace for people to buy and sell cars efficiently for a competitive price.
These challenges are amplified when combined with the issues and lack of resources of emerging markets. Frontier Car Group was born to solve and fix them.”Sujay Tyle, CEO of FCG
OLX’s investment comprises an undisclosed amount of primary cash injection into FCG, and an acquisition of shares held by other investors, management and key people. The joint venture shares owned by OLX in India and Poland also form a part of the investment by OLX in FCG, bringing FCG’s value to $700 million.
Together with FCG, we are aiming to build the leading global used car marketplace, offering a premium and convenient service to millions of car buyers, sellers and dealers. We’re in a unique position to accelerate the expansion of this platform worldwide.Martin Scheepbouwer, CEO of OLX Group
OLX’s move to affect the car e-marketplace globally, through its deal with FCG, holds the potential to make car trading easier and more efficient with the combination of the two online forces.
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