CarZar.co.za, which was founded in 2016, is now being backed by Vostok New Ventures, the Sweden-listed investment firm behind Avito, Russia’s leading online classifieds company.
Vostok New Ventures is listed on the NASDAQ Stockholm Exchange and has also funded other successful online tech-brands: BlaBlaCar, a leading long-distance ride sharing service; Gett, an on-demand taxi hailing service available in Israel, Russia, UK and New York City; and babylon, a leading AI-driven digital healthcare company.
Vostok New Ventures’ investment in CarZar is part of a larger funding round. CarZar is also backed by Silvertree Capital, the South-African based venture capital firm behind PriceCheck, the lprice comparison website, and CyberCellar, South Africa’s oldest online bottle store.
CarZar is an online car buying service for the second hand auto-trade industry in South Africa. In operation for only a year, the startup has been disrupting the second-hand car market by introducing technology to an industry that has remained traditional for decades.
CarZar Joint MD Fernando Pineiro says that, with this new round of funding, it will focus more on improving customer experience, as well as boosting marketing, and recruiting more talent to join their international team.
CarZar entered the second-hand car market with a clear mission: “empowering SA consumers to sell their pre-loved vehicles seamlessly”.
Potential sellers can go onto the CarZar.co.za website, and enter their cars details. CarZar’s algorithm will generate an estimate for the vehicle’s selling price instantly. If the sellers are happy with the estimated value, they can book a free inspection with one of CarZar’s fully trained car inspectors, at one of CarZar’s Car Buying Centres or at their preferred location. Within 20 minutes, the inspector will make a final offer to the seller. CarZar then makes an instant payment and takes care of all the paperwork. In all, the process takes 30 minutes.
The CarZar service comes at no cost to customers and is 100 percent obligation-free.
Vostok New Ventures identifies investment opportunities with strong network effect characteristics through expertise, experience and a widespread network.
Although CarZar may be a young tech-startup, the company has seen extensive growth while entering the market with a strong brand promise to guarantee safety, transparency, convenience and competence throughout the car selling experience. CarZar has expanded its scope from Cape Town to Johannesburg and Durban.
Pinheiro says consumer education is one of the biggest challenges CarZar has faced: “South Africans are proving to be ready to welcome new ways of getting ‘stuff done’. With the local market being extremely diverse and the auto industry being among the most traditional ones, South Africans are still familiarising themselves with new ways of selling their vehicles.
“We see technology being our key differentiator and main driver of growth. Additionally, we foresee territorial expansion in South Africa, introducing our services to even the smallest of towns.”