Internet giant Naspers, recently announced it was investing $89 million in the C stage funding round for Frontier Car Group. Frontier is an online and offline retailer of used cars.
The investment was made through its early stage investment arm OLX Ventures.
What will the funds be used for?
Frontier will use the proceeds to expand into new markets and enhance cash services for users. Frontier currently has operations in Nigeria, Mexico, Chile, Turkey, Pakistan, and Indonesia.
Will Naspers be lucky this time?
The company’s prior attempts at online platforms in Nigeria have not done well.
OLX, an online classified ad agency in February this year announced it was shutting down operations in Nigeria and some other African countries.
Naspers this year divested its stake in Konga, which was acquired by Zinox Technologies.
Prior start ups such as Kalahari, Dealfish and Mocality also had a short lifespan.
Challenges of online operations in Nigeria
Aside the relatively small market, online businesses in the country have also been hampered by the poor state of infrastructure. Power supply is irregular, and most businesses have to generate theirs. Internet data is also fairly expensive.
Naspers, founded in 1915 is one of the largest internet and entertainment companies in the world. The company is listed on the Johannesburg Stock Exchange, with a secondary listing on the London Stock Exchange. Firms in which Naspers has holdings include Tencent, Flipkart, MultiChoice and DSTV.
Frontier Car Group was founded in April 2016 by Sujay Tyle, Peter Lindholm and André Kussmann. Other investors in the firm include TPG Growth and Balderton Capital.