Carbin Africa takes on the ‘messy middle’ in Lagos’ car market

Despite soaring inflation and a crumbling local currency, car dealer Precious Okoedion says no week goes by without a car sale at any one of his three dealerships across Lagos State, Nigeria. Okoedion says many of these sales—over 30 since 2023—have been facilitated through the auto tech platform, Carbin Africa.  Launched in 2023 by two ex-Cars45 employees, Femi Oriowo and Fawaz Abdul, Carbin Africa is digitising car inventory and sales processes for car merchants and dealerships in Lagos, Nigeria’s biggest car market.  Before joining Carbin Africa, Okoedion says he was just a “street trader working with Cars45,” where he first met and established a relationship with the Carbin Africa co-founders. Since joining the platform, a wide variety of merchants, dealers and their inventory have since opened up to him. “A client will walk in here and say, okay, he wants [a Lexus] RS350, I don’t have it. I can quickly log into Carbin Africa and get what I want,” says Okoedion, in the Yaba outlet of his business, Okopi Auto Limited. Beginnings Oriowo’s path to founding Carbin Africa began when he was an OLX merchant serving as a middleman between Computer Village vendors and end buyers. He recalls passing by several car dealerships to and from the popular computer hardware market on the Lagos mainland, and thinking that selling cars on an online marketplace was not too far-fetched.  Once, buoyed by youthful courage, he entered into one of the dealerships and asked the owner if he could list the inventory on OLX and earn a commission.  “I was really confident in those days,” Oriowo says in his office in the heart of Yaba, Lagos’ famed tech cluster. The dealer agreed to the arrangement, providing him with photos and specifications of the inventory.  Within a week, he’d sold his first car, he said.   In a complete move towards car sales, Oriowo joined Cars45 after it launched in 2016 and built a merchant network with classmates from the University of Lagos where he was studying to become a geophysicist. He says they spread out at Cars45’s five retail centres across Lagos and he set up a corporate bank to process their sales centrally. Then they “started to sell cars aggressively,” he says, at least 25 per month.  Eventually, because of the traction they had, Oriowo says he secured a 30-car monthly consignment deal from Cars45 management at the time. The deal was contracted on condition that he could find a physical lot for the consignment.  Fawaz Abdul and Femi Oriowo launched Carbin Africa after participating in 54Collective’s Gen F Venture Studio program Together with his crew, the dealership initially operated from Abdul’s grandmother’s backyard before Cars45 offered to co-fund a proper car showroom. But before business could fully kick off there, COVID-19 lockdowns happened, followed closely by management changes at Cars45, summarily ending the agreement. Oriowo says they adapted by reducing inventory with the capital they had and partnering with dealers to sell their inventory for commissions—₦50,000 per car. “They (dealers) really loved it because they only had to worry about buying the cars; they did not have to worry about selling,” Oriowo says.  It was this collaboration with dealers combined with previous experience working as merchants on Cars45 that revealed challenges and market gaps which ultimately led to Carbin’s founding, Oriowo says. Unique selling point Carbin Africa is one of several online platforms that have launched since 2010 to ease the buying and selling of cars in Nigeria.  To buy a car in Nigeria prior to 2010, you needed to visit any of several small and medium sized dealerships, or find listings in a newspaper, or attend a car auction, or know someone who had a car they were looking to sell. Marketplaces like Cheki—whose Ugandan and Kenyan operation Cars45 acquired in 2021, OLX, and  Jiji facilitated the move online connecting anyone who wanted to buy or sell a car. Later startups like Cars45—which launched in 2016 and was acquired by Jiji in 2021—introduced, as its standout feature, verification and inspection services which were sorely needed in a low-trust market prone to fraud. In Lagos, the car market relies heavily on middlemen, according to Richard Odoboh, one such middleman who has been using Carbin Africa since it launched. These middlemen, or auto merchants as Carbin refers to them, know where you can find a good Nigerian-used Toyota Camry or who deals in good UK-used vehicles—used vehicles, valued at an estimated $1.24 billion, comprise about 90% of the car market in Nigeria. In the best case scenario, they know how to verify the authenticity of car vehicles or where to avoid buying a car. In 2018, five West African countries made up the top 10 importers of used light duty vehicles from Europe in 2018. Source: Compiled by UNEP based on data from the European Commission- Eurostat Comext Database, 2019 Their operations though, like your neighborhood tuck shops, are highly fragmented. It is unclear, for instance, how many of such middlemen there are exactly in Lagos. Oriowo says there’s likely around 10,000 across the country with a large percentage stationed most of the time in Lagos.  These middlemen or auto merchants are Carbin Africa’s prime target customers. Oriowo argues that while end users might make a purchase, on average, once every few years, a middleman might sell two or three cars per month.  By bringing together car dealers—which Carbin Africa defines as established brick and mortar dealership with at least five cars in their inventory and a dedicated staff to interface with the startup—Carbin Africa makes available to the them a large variety of cars to trade in.  “I get cars from Carbin and then clients from Jiji,” Odoboh says, adding that he’s sold about 15-20 since joining the platform in 2023. He says he’s made as little as ₦50,000 and as high as ₦1 million in individual commissions. The platform is also solving for what Oriowo says remains a challenge for middlemen or auto merchants who use existing marketplaces: obsolete listings