Kenyan automotive marketplace Peach Cars has raised $5 million in a seed funding round led by The University of Tokyo Edge Capital Partners (UTEC).
Peach Cars operates a business similar to the U.K.’s Cazoo or Autochek and Moove, larger African mobility startups who offer car ownership and vehicle maintenance services. Peach Cars differs to those two African counterparts who run B2C or B2B2C models, against Peach Cars pure C2C model.
Peach Cars has a higher limit on mileage and the age of cars it buys and sells than Cazoo, who now operate solely in the U.K. It offers a 225-point inspection system, benchmarked against Japanese auto industry standards, as 80% of cars in Kenya are of Japanese make.
The company says it uses a smart engine check device that uses its own proprietary software to automate its car inspection process. Customers get an updated mileage number when they purchase as well as a full diagnostic report, including recommendations on immediate repairs and value.
It aims to bring transparency, security and an improved customer experience to the process and ensure transactions are quick, secure and hassle free.
According to the company, buyers benefit from detailed vehicle information, verification of sellers and vehicles, secure payment and handovers and logbook transfers. Sellers can expect a wide customer base to sell to, quick sales at good prices, followed by fast and full payment and a single point of contact for account management.
Since its inception in November 2020, Peach Cars has added additional services, including vehicle servicing and maintenance, which features regular servicing, expert advice on car maintenance, clear processes and quality control systems that ensure outcomes are delivered. It also offers car loans, car insurance and general servicing.
Peach Cars earns revenue from service fees and commissions on successful transactions between buyers and sellers. It earns extra revenue from bolt-on services, including administrative work from agreement, inspections, handovers and change of ownership transactions.
Competitors include AfriCar which launched in 2022 with Stellantis as a minority backer and, according to founder Axel Peyriere, who spoke at AIM Group’s AutosBuzz 2023 last month, plans to launch in three or four new markets this year.
The funds will be used to grow the business, hire more staff and invest in R&D to expand its technology solutions.
“Customers would like to find truthful and transparent ways to maintain their vehicles; hence Peach is accommodating its needs by providing the car care service,” said Peach Cars COO and co-founder Zachary Petroni. “Peach can leverage its inspection methods and information for the better diagnosis of the vehicles and the quality assurance of the fixes made on vehicles.”
The funding round also featured other angel investors, including Shintaro Yamada (founder and CEO of Mercari), Peter Kenevan (VP, Head of Japan at PayPal), and Hiroaki Ohta (general partner at Japan’s Waseda University Ventures).