OLX Group has announced it will lead the Series D funding round in Berlin-based Frontier Car Group (FCG). OLX, which is owned by Naspers’ digital division Prosus, said it will invest as much as $400 million in the company. But the deal is not all cash. It is a mixture of equity, secondary share acquisitions and existing business shares. According to TechCrunch, the deal will include an unspecified amount of primary cash injection.
Founded in 2016, Frontier Car Group is an online marketplace for used cars operating in emerging markets. Although OLX also supports the buying and selling of used cars on its platform, they are simply just classified ads.
Frontier goes beyond this. Its services include technical inspection, valuation, financing, warranty and insurance services. It operates in 10 countries including Nigeria (through Cars45), Chile, USA, India, Poland, Indonesia and Mexico.
Over the last year, the company made $700 million in revenue, tripling its income from the year before that.
TechCrunch reports that it has sold over 50,000 since 2016.
“This is a testament to FCG’s team, the ripe market opportunity, and the results of early integration with OLX in our key markets,” Sujay Tyle, Frontier’s 26-year-old founder said.
With the latest OLX deal, Frontier could expand its services and market reach. The company has now raised $569 million and is valued at $700 million.
“Together with OLX and Prosus, we are aiming to revolutionize the used car market in several emerging and developed economies by adding trust, transparency and a comprehensive suite of services to all participants in the ecosystem.”