Jiji has announced one of the unanticipated acquisitions in Africa tech space this year by acquiring one of the biggest marketplace for cars in Nigeria, Cars45 for an undisclosed amount. Jiji is the largest online marketplace for buyers and sellers in Nigeria, while it is one of the biggest e-commerce platform in Africa, the news that Jiji acquires Cars45 is a surprise to so many.
Jiji is still one of the oldest platforms in e-commerce with a classified model of business- Classified models are types of businesses that tend to arrange or group similar things, goods or products together according to subject or similarities. But the buyer and seller marketplace is looking away from its usual model with the latest acquisition since its launch in 2014.
This news has so many perks for both platforms and their users but before we get to that, Let’s take a look at the journey of Cars45 before it got here.
Cars45 has been under different ownership within the past three years that people might have lost track of how many times the company was sold. So it’s important to get that straight.
In 2017, Cars45 raised $5 million from Frontier Car Group (FCG), a 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.
Two years later, OLX Group, via its OLX Autos brand (a division of Prosus, the Netherlands-based separate tech holdings of South African tech giant Naspers), acquired Cars45 from FCG for a whopping $400 million. The investment pegged FCG at a $700 million valuation. And now, JIJI is also acquiring Cars45 from OLX Group.
As to why OLX Group might have decided to sell off one of its brands. You should know that OLX Autos shut down FCG’s operations in Berlin in March 2021 but still kept control of Cars45 and two other brands: CarFirst in Pakistan and WeBuyAnyCar in the U.S. However, according to the announcement released by the company, OLX Autos’ new focus was on Asia and Latin America, which might be a tenable reason to sell Cars45.
With recent updates, OLX Group might want to hands off most of its businesses in African markets, except South Africa. We are still looking for more answers here
Looking at the benefits and the opportunities this acquisition might cause for both Jiji and Cars45, it will help mitigate problematic trust and safety concerns that have sometimes besieged 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.
Speaking on the integration of both platforms, Anton Volyansky co-founder 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.
Therefore, the acquisition will see Cars45 grow the vehicles category. Furthermore, cars45 will merge its operations in Nigeria (primary market), Ghana and Kenya with Jiji as the classifieds marketplace to consolidate its position in the space.
What you should know about jiji
You should know that this is not the first time Jiji and OLX have dined at the same table doing business together. In 2019, the Naspers-owned online marketplace sold its assets in Nigeria, Ghana, Kenya, Tanzania and Uganda to the seven-year-old classifieds player. As a result, Jiji now commands 10 million unique monthly visits and three million active listings, according to the company stats
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).
Since its launch in 2014, for the first time Jiji is exploring a business outside its usual classifieds model, which has brought it profitability according to the company.
Volyansky calls it a bold step and an important foundation “for building the future of the company.”
You should also know that this acquisition did not rip Jiji of future competition. Right now, Jiji has regional competitors in Swiss-owned ROAM and Jumia Deals, and then there’s Autochek.
Yet, Volyansky believes the acquisition of Cars45 might be the first of many transactional marketplace acquisitions to set Jiji apart from other players as it looks forward to jointly build an African Champion in the O2O Automotive Sector.
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