Online classifieds firm OLX to pour up to $400m in Frontier Car Group

OLX Group, the classifieds business of Naspers’ international internet assets division Prosus, is set to invest up to US$400 million into Berlin-based Frontier Car Group (FCG), which operates online car marketplaces in emerging markets.

Frontier Car Group co-founders Sujay Tyle (left) and Peter Lindholm / Photo credit: OLX

Under the deal, OLX will inject capital in FCG and contribute its joint-venture shares in India and Poland, as well as acquire shares held by other investors, founders, and management. The transaction, which is subject to a tender offer process, would see OLX as the largest shareholder in FCG, according to a statement.

Founded in 2016, FCG develops, launches, and operates online and offline used-car marketplaces in more than 10 countries, including Pakistan and Indonesia. Through the company’s platforms, dealers gain access to a wider range of inventory, inspection reports, floor plan financing, and pricing guides, among others.

The full integration of the two companies will allow for faster expansion and improvements, such as a dealership management system and enhanced resale capability, OLX said in a statement.

“We’re in a unique position to accelerate the expansion of this platform worldwide,” said OLX chief executive Martin Scheepbouwer. “Our experience in India is a great proof of concept, where within the space of a year, our joint venture has already increased the number of stores threefold, with car purchase volumes continuing to grow by 10% month on month.”

Sujay Tyle, FCG’s co-founder and CEO, also said that the company has nearly tripled its performance across its key metrics since OLX’s US$89 million investment in 2018.

According to a statement, FCG has raised more than US$150 million since its inception three years ago, counting TPG Growth and Balderton Capital as its other investors.

In April, the classifieds company invested US$56 million in Singapore-based consumer-to-consumer marketplace Carousell for a 10% stake. As part of the deal, Carousell acquired OLX’s Philippine operations, which had 6 million monthly unique users at the time.