OLX, the classifieds-focused division of consumer internet company Prosus, has invested $400m in Germany-based second-hand car marketplace operator Frontier Car Group (FCG), TechCrunch reported yesterday.
The deal reportedly includes a pending secondary investment along with direct equity purchased at a $700m post-money valuation. Prosus is a public-listed offshoot of media and e-commerce group Naspers.
OLX will invest over multiple tranches, including an initial injection making it FCG’s largest shareholder at a sub-$350m valuation, and stocks committed from its existing partnerships with FCG in India and Poland.
Founded in 2016, FCG runs an e-commerce marketplace where drivers, dealers and fleet operators can buy and sell cars. The business is currently active in eight countries and also offers automotive services such as investor listings and insurance.
The company primarily targets developing economies where consumers are less likely to shell out for new vehicles.
OLX reportedly plans to combine FCG’s operations with other used car joint ventures it is set to acquire as well as its wholly-owned presence in Latin America, Asia and Poland – three markets representing an estimated 30 million used car sales each year.
FCG raised $152m of funding prior the latest cash injection. OLX had already pumped $89m of series C funding into the business in May 2018, weeks after a $41m series B round for FCG raised together with $17m of debt financing.
Balderton Capital and TPG Growth co-led the series B round with participation from Fraser McCombs Capital and Autotech Ventures, after the former two had also backed FCG’s $22m series A in 2017 alongside EchoVC+, Partech Ventures, New Enterprise Associates and undisclosed family offices.