Dubai-based online used car trader SellAnyCar.com raised $35 million (Dh128m) in its latest funding round as the company seeks to expand across the Gulf and roll out more products.
Sanabil Investments, a subsidiary of Saudi Arabia's Public Investment Fund, the kingdom's sovereign wealth fund, is the lead backer in the start-up's fund-raising round alongside Olayan Financing Company, Gulf Investment Corporation (GIC) and existing investor iMENA Group, the company said on Tuesday. Evercore was the financial adviser to SellAnyCar.com on the deal.
"In the past few years we've seen tremendous developments in Saudi, it's very promising, the market is full of digital natives, half the country is younger than 35 years, and we will solve a major problem: the hassle of selling used cars," Saygin Yalcin, chief executive of SellAnyCar.com, told The National. "It's a combination of the right timing, a population of younger people, and people have a positive vibe about the future."
The deal comes after a record number of start-ups in the Middle East and North Africa received venture funding last year, with the number of deals increasing by 31 per cent to 564, according to Magnitt, a start-up data platform. It predicts the venture capital scene could see $1 billion worth of investments in 2020 as more start-ups look for capital and government investments in venture funds kick into action.
Saudi Arabia's sovereign wealth fund has invested heavily in tech start-ups as the kingdom seeks to diversify its economy, build local industries, attract talent and create jobs.
SellAnyCar.com, an online marketplace for used cars, plans to expand into other countries in the Gulf, the Levant and North Africa over the next three years, Mr Yalcin said. Oman, Bahrain and Kuwait are next on its road map.
Expansion across the Gulf would allow the company to benefit from cross-border trading whereby, for example, a used car dealer in Oman can buy a used vehicle from a consumer in Saudi Arabia, Khaldoon Tabaza, founder of iMena Group, said in an interview.
The online car seller has seen business pick up, as sales of used cars begin to outpace new car sales, Mr Yalcin said. The start-up is profitable, he added, declining to provide details.
"Our business is doing tremendously well," Mr Yalcin said. "We see major structural changes in the automotive industry."
The company plans to employ more than 300 nationals in Saudi Arabia and open 100 branches throughout the kingdom.
The new funding will also be used to roll out more products to the market, such as the buyanycar.com platform, through which customers can purchase cars, Mr Yalcin said.
The latest funding round brings total investments into SellAnyCar.com, which was established in the UAE in 2013, to $50m.
The start-up's record growth rates are driven by a rise in online businesses and ecommerce, the increase of internet penetration and the growing popularity of opting for used cars rather than new ones, Mr Tabaza said.
"The used car trading market in the region is maturing and growing as the region normalizes the ratio of old to new car sales," Mr Tabaza said. "The increase in used car trading and the size of the Saudi market are the biggest drivers of the rationale to expand."