Peach Cars, a Kenyan startup aiming to democratize car ownership in sub-Saharan Africa, has successfully raised $5 million in seed funding. The funding round was led by The University of Tokyo Edge Capital Partners (UTEC), based in Japan, and included participation from notable angel investors such as Shintaro Yamada (founder and CEO of Mercari), Peter Kenevan (VP, Head of Japan at PayPal), and Hiroaki Ohta (general partner at Japan's Waseda University Ventures).

Founded in 2020 by Kaoru Kaganoi and Zachary Petroni, Peach Cars intends to address the challenges faced by consumers in Kenya's used car market. The founders identified a lack of trustworthy second-hand marketplaces with transparent pricing, information asymmetry, fraud, insecure payments, and poor customer experience. Drawing from their extensive experience living in sub-Saharan Africa, as well as conversations with friends and industry peers, they saw an opportunity to transform the market.

CEO Kaoru Kaganoi shared his own difficulties in finding affordable second-hand items, including furniture, electronics, and reliable vehicles upon his move to Kenya. Recognizing the absence of established inspection methods and service providers, Kaganoi emphasized the need for quality checks and the importance of connecting buyers with reputable mechanics.

Before launching Peach Cars, the founders meticulously evaluated key factors such as market viability and unit economics. They understood the significance of building operations and decided to focus on high-value asset classes within Kenya. Their previous experiences in the mobility sector, particularly at the ride-sharing app SafeBoda, also provided valuable insights.

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Contrary to the misconception that Africans make small purchases without considering the process and outcomes, Kaganoi highlighted the importance of delivering a delightful experience to all customers, regardless of their budget. He noted that Africa's young population and growing middle class are seeking convenient and trusted services in the automotive industry, prompting the creation of Peach Cars to enhance transparency and overall car ownership experience in Kenya.

Peach Cars claim to have developed a smart engine check device, powered by its proprietary software, to automate the car inspection process. This 225-point inspection system adheres to Japanese auto industry standards, considering that 80% of cars in Kenya are of Japanese make. It provides users with comprehensive and accurate reports on the vehicle's systems.

While Peach Cars share similarities with larger African mobility startups like Autochek and Moove, which focus on car ownership and repairs, it differentiates itself as a pure peer-to-peer (C2C) marketplace, akin to Jiji. However, Peach Cars set itself apart by educating users on the entire car ownership lifecycle, offering faster discovery processes, improved transaction and payment management, as well as car maintenance and servicing.

Peach Cars generate revenue through service fees and commissions from successful transactions between buyers and sellers. It also offers value-added services, including administrative support for agreement transactions, inspections, ownership transfers, secure payments, and handovers. The company has witnessed significant growth, currently generating over $200,000 in gross merchandise value (GMV) monthly, a tenfold increase since its launch two years ago. The founders aim to establish a fully automated inspection centre by 2024.

Kiran Mysore, Principal at UTEC, expressed confidence in Peach Cars' customer-centric approach, advanced technology, and operational excellence. UTEC, proud to partner with Peach Cars, aims to facilitate Japan-Africa collaboration by leveraging Japanese automotive expertise and network.