OneLot, an innovative lending platform targeting the used car market in the Philippines, has successfully raised $4 million in pre-seed funding. The funding round was led by 468 Capital and included participation from Kaya Founders, Crestone Venture Capital, 21yield, Founders Launchpad, and various angel investors. This significant investment is set to bolster OneLot's mission of transforming how used car dealerships access financing, addressing a critical gap in the market.

Funding Purpose and Future Plans

The freshly acquired capital will be instrumental in expanding OneLot’s reach among small and medium-sized enterprise (SME) dealerships while accelerating product development, particularly in artificial intelligence (AI). The startup's founders—Harm-Julian Schumacher, Tommy Campos, and Subramaniam Srinivasan—aim to empower local car dealerships with faster and more accessible financing solutions.

“Our platform is tailored to meet the specific needs of car dealers, streamlining the typically lengthy financing process. By leveraging our AI-driven underwriting algorithm, we can provide higher credit limits, competitive interest rates, and rapid fund disbursement compared to existing providers,” explained Subramaniam Srinivasan, OneLot's Chief Technology Officer.

Addressing a Critical Market Need

Founded in 2023, OneLot focuses on one of the most pressing challenges faced by used car dealers: limited access to credit. This issue is exacerbated in the Philippines, where over 90% of car transactions are conducted by small and family-run dealerships, and traditional banks have a minimal presence in the used car financing landscape. As a result, financing rates in the Philippines are significantly lower than those in the United States and Europe, creating a pressing need for tailored financial solutions.

The used car market in the Philippines is valued at approximately $8 billion and has been experiencing rapid growth driven by rising income levels and increased demand for vehicles from the middle class, coupled with inadequate public transportation options. OneLot's funding will enable it to address these challenges more effectively.

Progress and Achievements

Since its inception, OneLot has made impressive strides, disbursing over $1.3 million in loans and financing more than 200 vehicles within just a few months of operation. The company has reported a remarkable tenfold increase in revenue during the second and third quarters of 2024, a clear indicator of the demand for its services.

“The potential for OneLot to solve significant problems within the burgeoning used car market is immense. The team’s deep understanding of car dealerships and SME credit in the Philippines, combined with their extensive experience in digital product development and AI, sets them up for success,” stated Guilherme Steinbruch, a Partner at 468 Capital.

Industry Insights

The Philippine automotive market is one of the fastest-growing globally, with a distinct lack of accessible financing options contributing to challenges for dealers. OneLot aims to bridge this gap, ensuring that used car dealerships can stock their lots with inventory necessary to meet consumer demand. By offering financing that caters specifically to the buy-and-sell cycles of car dealers, OneLot is positioning itself as a critical player in the industry.

With its recent funding, OneLot is poised to make a substantial impact on the used car financing landscape in the Philippines. The startup's innovative approach to lending, powered by AI and a deep understanding of the local market, offers a promising solution to an industry that has long struggled with accessibility to credit. As OneLot accelerates its growth and product development, it aims to empower local dealers, enabling them to thrive in a competitive marketplace and ultimately enhancing the overall automotive industry in the region.

As the company continues to expand its operations, it stands as a testament to the potential of fintech innovations in transforming traditional industries and meeting the evolving needs of consumers and businesses alike.