OLX Group to become largest shareholder in Frontier Car Group
OLX Group (OLX), Prosus’ classifieds business, is pleased to announce its intention to increase its ownership in online car marketplace Frontier Car Group (FCG), becoming the company’s largest shareholder. Frontier Car Group builds and operates pre-owned car automotive marketplaces within emerging markets and OLX is one of the leading classifieds players in the world.
In India, OLX and FCG work together as a joint venture since 2018, sharing technological resources, expertise and knowledge to build and operate OLX CashMyCar stores across almost 17 cities.
OLX Group's new investment of up to US$400 million, comprises a primary injection of capital in FCG, the contribution of OLX’s joint-venture shares in India and Poland, as well as the acquisition of shares held by early investors subject to a tender offer process. Regardless of the uptake by investors in the tender process, the transaction will result in OLX becoming the largest shareholder in FCG. The deal will strengthen the already successful partnership between the two companies, helping to accelerate FCG’s ranking to one of the top five car marketplaces worldwide. In India, it will propel the growth of OLX CashMyCar as the leading offline store for pre-owned cars. In the past year, OLX CashMyCar has grown to 75 stores across 17 cities in India with plans to expand to 40 cities with 150 such stores by 2021.
Fully integrating the two companies will allow for faster expansion while improving and increasing the services available to buyers and sellers, setting a new industry benchmark for the pre-owned car trade. Dealers will benefit from improved intelligence via a Dealership Management System (DMS), an enhanced resale capability via OLX, and provenance and pricing data. Sellers will also gain a new range of ways to sell their pre-owned cars in a trusted and transparent way.
Bhaskar Bagchi, General Manager, OLX Cash My Car, India said, “Our joint venture with FCG in India will enable us to grow OLX CashMyCar as the leading pre-owned car offline marketplace by offering a reliable and convenient service to the entire pre-owned car ecosystem comprising of car buyers, sellers and dealers. OLX CashMyCar stores have tripled their presence across India in the last year and car purchase volumes are growing by 10% month-on-month with over 1 million users being engaged since January 2019. The low motorization rate and increasing aspiration exhibited by car buyers and sellers will enable us to expand our presence to 150 stories across 40 cities by 2021 from 75 stores across 17 cities currently.”
Sujay Tyle, Co-founder and CEO of Frontier Car Group, said: “FCG has nearly tripled performance across every key metric since the first OLX Group investment less than 18 months ago and has expanded to four new countries in that time. This is a testament to FCG’s team, the ripe market opportunity, and the results of early integration with OLX in our key markets. Together with OLX and Prosus, we are aiming to revolutionize the pre-owned car market in India by adding trust, transparency and a comprehensive suite of services to all participants in the ecosystem”.
Martin Scheepbouwer, CEO of OLX Group, said: "Together with FCG, we are aiming to build the leading global used car marketplace, offering a premium and convenient service to millions of car buyers, sellers and dealers. We're in a unique position to accelerate the expansion of this platform worldwide."
OLX, the fastest-growing global classifieds group, first invested US$89M in FCG in 2018, providing capital for the Berlin-based start-up to enhance its services and expand to new geographies, including the acquisition of WeBuyAnyCar in the United States. Both companies currently work together in Latin America, Asia, and Poland, where, collectively, nearly 30 million pre-owned cars are sold annually – more than double that of China.