Egypt has one of Africa's largest vehicle fleets with over 6 million cars. The ratio of used cars to new vehicles is 3:1. In Egypt, the used cars market is enormous, but it is in almost every country with a large population.
Several startups are trying to define the new era of used-car-sale platforms by upending incumbents. Some include the U.K., India, Brazil, and Mexico.
Sylndr is a new player in a market where the sales volume is dominated by dealers. The automotive marketplace, which allows customers to sell and buy used cars, has raised the largest pre-seed round of its kind in the Middle East and Africa.
The round was led by Saudi-based early-stage venture capital firm. Several regional and global angel investors took part in the event.
New cars are expensive, that's one reason for the huge demand for used vehicles in emerging markets. In Egypt, popular brands such as Nissan and GB Auto have good resale value. The buying experience of such cars is not great because of issues such as lack of trust and affordability.
The main problem that we are trying to fix in Egypt is a complete distrust between buyers and sellers of used cars. We want to quickly become the most trusted used car retailer in Egypt and the region.
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The average cost of popular car models in Egypt is $15,000. Many Egyptians earn less than that yearly, so they have to part with a lot. In Egypt, where only 5% of used cars are financed, it is almost non-existent, unlike in developed countries where systems are set in place to help people with vehicle financing.
If you make the cars more affordable to people, that's a core value proposition that we want to ship as well.
Sylndr is not yet available to the public. It is tailoring its model after India's Cars 24: obtaining cars from individuals that want to sell, buying them up for an agreed price, reconditioning them, and then reselling them to new owners. Sylndr will provide a seven-day money back guarantee, warranty, and availing flexible financing options to users.
Customers who want to sell their cars will be the first to be updated by the car retailer. Sylndr will open up to buyers in the fourth quarter of this year or the first quarter of 2023, according to Mazen.
The cars are being refurbished between the two events. A refurbished car on Sylndr would be slightly more expensive than a non- refurbished car on OLX and Contactcars. The chief executive argued that consumers would still prefer Sylndr based on quality and speed.
It's not a matter of prices being more, it's a matter of paying for value. If you don't have any car experience, you would want to buy something that gives you true value. If they can find that car and execute this process in 24 hours, it will be even better.
Sylndr is the image.
The startup wants to make money from retail sales, auction houses, and B2B sales. Sylndr might look into ancillary revenue streams such as interests from financing, insurance, fees from roadside assistance and other value added services.
El Defrawy was the CFO of Elmenus, an Egyptian food delivery startup, before starting Sylndr. Souq.com, Hello Fresh and Cazoo are just a few of the food delivery and e-commerce companies that Mazen has experience with. The capital intensive nature of the used car market and the background of their team members are reasons why they raised this large pre-seed round.
The secondary car market is highly fragmented and consumers don't have a trusted counterpart.
The used car market is ripe for disruption, and we are excited to be a part of Sylndr's journey as they transform and set an entirely new standard for the used car market. We believe in the ability of this team to crack this business model because of their unique background and experience.
The investment proceeds would be put into scaling the company's operational capability, technology infrastructure, growing inventory, and building its retail and non-retail channels to customers. Sylndr said it is looking to double its team size by the end of the year. The company has recently made inroads into North Africa via an acquisition, but it will face competition from other platforms.
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