Cars45 is unarguably the leading and most popular platform to buy used cars in Nigeria.
Founded in 2016 by Etop Ikpe, Iyamu Mohammed, Sujay Tyle, and Peter Lindholm, the early mission of Cars45 was to help Nigerians sell their cars within 45 minutes after inspection at any of the 55 Cars45 Inspection Centers in Lagos.
This mission appears to be under threat as the brains behind the innovative idea have ‘unceremoniously’ exited the company. Leading the top executives who recently left Cars45 are Etop Ikpe, the CEO/co-founder, and Iyamu Muhammed Co-Founder/ VP Trading.
An Unceremonious Exit?
On September 1st, 2020; all the social media pages of Cars45 (Instagram, Facebook, and Twitter) shared a rather unusual disclaimer:
This is to kindly notify the general members of the public that the following individuals: Temitope Ologunoye, Mayokun Fadeyibi, Muhammed Iyamu, John Egwu, Chetan Seth, Jde Adamolekun, Kenechukwu Udeh, Olakunle Martins, Mandela Oniemola, Ayodeji Olanisi, and Aisha Hussaini are no longer in the employment of our company with effect from August 25, 2020. They are not authorised to represent the company in any matter whatsoever. Anyone dealing with them on behalf of Cars45 is doing so at its own responsibility.
The disclaimer post which has since been deleted was an obvious sign of an internal crisis at Cars45 and clearly the investors were not happy about the exits. How can 11 top executives resign almost at the same time alongside the CEO?
Role Investor Money Played in The Crisis
In 2017, Cars45 raised a $5 million Series A round from the Frontier Cars Group (FCG), a holding company that is backed by Balderton Capital, EchoVC, TPG Growth, and NEA, amongst others.
The company as at then was expected to use the funding to improve its platform that sells, buys, and rates the condition of used cars in Nigeria. As such FCG became a major investor in the company.
Again, in November last year, OLX Group invested up to $400 million (₦144.6 billion) in Frontier Car Group (FCG) — a holding company that develops and operates used-cars marketplace, including Nigeria-based Cars45.
With OLX Group investing in FCG, Cars45 now has to deal with both OLX and FCG. This unquestionably whittled down the power of Etop Ikpe and other top executives.
Exited top execs set up a new company
You do not need anyone to tell you that the executives who left Cars45 with Etop Ikpe will sooner rather than later float a new business that will rival and become a strong competitor to Cars45. Etop Ikpe has been with Dealdey, Konga, and has always bounced back to startup something new.
Unsurprisingly, checks on LinkedIn shows that Ikpe is now listed as the CEO of NewCo, Mayokun Fadebiyi, its VP Commercial, Iyamu Mohammed is VP, New Market, Timitope Oluguonye is the COO while John Egwu is VP, Operations. There are little or no details about the new company.
Cars45 moves to retain staff
The morale of staff will be very low at Cars45 since the top echelon of the company has left. In an attempt to retain staff, a source told Techawk that the management has promised to pay the deductions which were made on the salary of workers in order to cushion the impact of COVID-19 on the company. At the same time, the management promoted some of the staff members and requested them not to have any dealings with any car company for the next 1-year.
What next for Cars45?
Cars45 is already a well-known brand not only in Nigeria but in Africa. It has already expanded to Ghana and Kenya. What the new management can simply do is to put these exits behind them and leverage the brand to consolidate their market dominance in Nigeria’s online used car marketplace space. However, they should watch their back as Etop Ikpe and his team will come ‘hard’ at them.