How startups applying tech to Africa’s automotive industry can be game changers

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African startups that modernise the very traditional automotive industry on the continent can be game changers and have the potential to be among the continent’s best-performing companies.

That is according to Etop Ikpe, the former chief executive officer (CEO) of Cars45 and the founder of Autochek, a newly-founded Nigerian startup aiming to build digital solutions that will enhance and enable a seamless and safe automotive commerce experience across Africa.

The process will start in Nigeria and Ghana, with Disrupt Africa reporting last month Autochek had acquired automotive marketplaces Cheki Nigeria and Cheki Ghana, previously part of ROAM Africa. 

Speaking on the latest episode of Disrupt Podcast, Ikpe, who previously also headed up e-commerce startup DealDey, said there had been no “aha! moment” when it came to coming up with the idea for Autochek. 

“The amount of time I’ve spent in the automotive industry, I’ve come to understand a lot of challenges across most African countries. I came to the realisation that there needed to be a broader approach to solving the problem,” he said. “The business is already very transactional, and the biggest problem in the industry is typically that solutions need to go deeper to support all parts of the ecosystem. None of the parts of the ecosystem can survive independently, they all work symbiotically.”

He said it had just been the right time to “go for it”, though he insists Cars45 is doing well and has a “fantastic management team” in place. When it comes to the broader potential of auto-tech in Africa, which over the last decade has just been about connecting buyers and sellers through marketplace models, Ikpe is convinced.

“That is the evolution that is coming. It is about providing solutions that can allow all participants within the ecosystem to thrive. Technology is the only way we can achieve scale. If you look at the automotive industry over time, globally, it is one that has struggled to transition, simply because it is a hard metal industry, and one of the most thriving industries over the last 100 years,” he said. 

“It’s one of the most established industries across the world. Many of the companies that are thriving today have structure and supply chains that have been laid out for decades and decades. So when are you going to apply tech to that kind of industry? It is traditional in its fundamental nature.”

But tech has a large role to play. Ikpe said Tesla is an example of how one company can revolutionise the space. 

“Auto-tech in itself is very key, there is a lot of opportunity. Particularly for Africa, because the industry hasn’t really grown over the years with the kind of structures that you find in Europe or the US. So the African automotive sector has grown very sporadically, and in a very fragmented way, even though it is thriving. We are not able to extract a lot of value because of the way it has grown,” he said. 

“It is only tech that can begin to bring transparency into the industry, and through that transparency you are going to find a lot of the other actors and players, like financial sectors players, and key verticals like that, that can thrive and bring value.”

Gradually more startups are becoming active in the auto-tech space, and Ikpe believes there is an evolution going on.

“I’m very excited. Over the next four to five years you’re going to find, if you talk about the top five, top 10 startups across Africa, there will definitely be one or two auto-tech startups just because of the value the automotive sector brings to Africa,” he said.

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The latest episode of Disrupt Podcast is available now, featuring in-depth interviews with Ikpe as well as Founders Factory COO Kofo Sanusi.

You can listen on Soundcloud, Spotify, Apple Podcasts, and all other podcasting platforms.

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Passionate about the vibrant tech startups scene in Africa, Tom can usually be found sniffing out the continent's most exciting new companies and entrepreneurs, funding rounds and any other developments within the growing ecosystem.

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