OLX Group, which operates a number of online trading platforms, has merged with Frontier Car Group, which operates vehicle sales platforms across Latin America, and the transaction creates the largest used car sales platform in the region.
OLX Group is an Amsterdam, Netherlands-based company that has invested some $500 million in Frontier Car Group since 2018, and the merger between the two creates OLX Autos, a company with a net worth of $1 billion.
OLX Autos has a presence in 12 countries: Argentina, Chile, Colombia, Ecuador, Peru, Mexico, India, Indonesia, Pakistan, Nigeria, Poland and the US.
Frontier Car Group was launched in 2017 with an initial $12 million investment by Sujay Tyle, Peter Lindholm, Andre Kussmann, Ignacio Detmer and Ricardo Donoso.
Ricardo Donoso, who along with Ignacio Detmer is Chilean, and is the co-founder and CEO of OLX Autos Americas, said the merger aims to create a unique platform for car buyers and sellers, “starting with a diverse list of used cars, nearby inspection centers, purchases and sales. snapshots, financing, insurance and more.”
He said the company has created a new type of market that “revolutionizes and sets a new industry benchmark for the global used car trade, mixing the online and offline worlds.”
The company’s business model is based on an ‘instant purchase’ service, making the buying and selling of used cars more efficient for both private sellers, buyers and professionals in the sector.
The merger comes as sales of new vehicles has fallen by 25% during the first half of this year, and are expected to close the year with an annual decline of 20%.
“From the beginning, with the founding team, we made the decision to grow exponentially, be a global benchmark and achieve the romantic dream of a startup of becoming a unicorn, for which we had to look globally from the beginning. In this strategy, we sought international financing, with an aggressive business plan and founding the company in different countries at the same time,” Donoso said.
Donoso and Detmer were advised by Chilean law firm Carey on the transaction, with a team comprising partner Francisco Guzmán and associates Carlos Alcalde and Andrés Latorre.
This is the first time that a start-up co-founded by two Chileans achieves ‘unicorn’ status, according to a statement from the law firm.
“Due to the level of operations of the companies involved, the transaction included negotiations under different laws and jurisdictions,” the firm said.