Innovation Development Oman (IDO) Investments on Tuesday announced its investment in Carzaty with the purchase of a minority stake in the online retailer of new and used cars.
Founded in 2017 in Muscat, the e-commerce startup Carzaty taps into the latest technology and retail trends to offer a more affordable and convenient way to buy cars. The IDO’s investment follows Carzaty’s recent expansion to the UAE, marking its first step towards regional expansion in the GCC.
Speaking to media-persons while announcing the deal, Mazin al Naamani, portfolio impact lead at IDO Investments, said, “We participated in Carzaty’s whole round of fund raising, which is around US$4mn. We became part of the company through convertible debenture, typically done in case of venture capital funding. Our stake in the company will depend on the next round of funding.”
Usually, IDO takes minority stakes in the ventures it finance, which is in the range of 10-30 per cent in the firm on a long term basis, Naamani said.
He said, “With this investment, we expect Carzaty to expand further on a regional scale, and in turn, enter the global market and compete at the international level. We will support them in developing their business, which will subsequently create an added value to Oman’s economy, both in terms of job creation for Omanis as well as provision of world-class customer service to the national and regional markets.”
Hassan Jaffar, managing director and chairman of the board of Carzaty said, “We are proud to have sold hundreds of cars since our launch in 2017, with hundreds of happy customers validating Carzaty’s new car buying experience. Now, together with the support of IDO Investments and our other shareholders, we can further build our capabilities in the UAE and reach other important regional markets, including Saudi Arabia and Kuwait.”
Explaining Carzaty’s business model, managing director MarwanChaar, said, “Carzaty is elevating auto sales into the digital age, allowing buyers to search, compare, purchase and finance cars from the comfort of their homes. By replacing expensive retail showrooms with a simple and transparent online experience, we are able to sell high-quality used cars at prices far lesser than a traditional dealer.”
On expansion plans, Chaar said the company will now focus more on expanding its operations in neighbouring UAE for the next six months.
IDO Investments is the sultanate’s first strategic venture capital firm backed by State General Reserve Fund (SGRF) and Omantel.
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