South African venture capital firm Silvertree Capital has invested in local startup CarZar, an online marketplace for the second-hand auto-trade market.
Founded this year, CarZar uses national data to provide fair, statistics-based pricing and offers sellers a safe and convenient way of selling previously owned vehicles, while answering the increased demand from the local vehicle trade for stock.
The startup offers an online-only model, a 30-minute sales service and data-based pricing, with Fernando Azevedo Pinheiro, joint managing director (MD) of CarZar, saying with internet connectivity on the rise, more and more consumers are utilising services provided online or through mobile apps.
With car-pooling and ride-sharing apps on the rise for easy travel in cities, CarZar is based on the premise people’s attitudes towards cars are steadily changing from that of ownership to sharing.
“These influences combined mean that the prestige of owning an expensive car is slowly being replaced by a more utilitarian attitude towards cars. The auto-trade market as we know it today will look fundamentally different in the next five to ten years, in our view. The demand for second-hand cars is, therefore, on the rise,” Pinheiro said.
Fellow joint MD Michael Muller said disruption forces traditional businesses to reinvent themselves to compete with nimble startups.
“In South Africa, the taxi, hospitality, media, property and electronics industry have all been turned upside down by online entrants. Now it is the turn of cars,” he said.
“The way we use cars is changing, fundamentally and rapidly. The Uber phenomenon is showing no sign of letting up and car sharing apps are on the rise. Major car manufacturers are looking into models which allow people to borrow rather than own cars.”
