South Africa’s WeBuyCars Lists on JSE
The African secondhand vehicle trader market is a vibrant and dynamic sector, driven by factors such as affordability, availability, and a wide range of choices for buyers. In South Africa, this market is particularly robust, with the country’s used car market projected to grow significantly, with a CAGR of over 8% from 2024 to 2029, according to the “South Africa Used Car Market Outlook, 2029” report by ResearchAndMarkets.com.
WeBuyCars recently entered into the South African market, listing on the Johannesburg Stock Exchange with an initial market capitalization of 8.3 billion rand (USD 441 M). Chief Executive Faan van der Walt, alongside his co-founder and brother Dirk, celebrated the milestone as the opening share price of 20 rands was announced. This debut makes WeBuyCars the second listing on the JSE in 2024. In response to the addition of WeBuyCars on the Johannesburg Stock Exchange (JSE), Valdene Reddy, the Director of Capital Markets at the JSE, expressed delight at having a new company on the exchange this year.
The company, which holds a 10% to 12% market share in South Africa, has its sights set on 23% by 2028 and a monthly sales target of 22,000 cars, up from the present 14,000. With 15 branches and 74 buying pods or kiosks in shopping centers, WeBuyCars looks to expand further, with plans to open in Rustenburg, Bloemfontein, and East London. In 2023, the company sold a total of 142,337 vehicles and bought a total of 141,851(reportedly). WeBuyCars was spun off from Transaction Capital and listed separately to unlock value and offer investors with a direct opportunity to invest in the secondhand car retailer. The move aligns with Transaction Capital’s broader strategy to settle holding company-level debt using proceeds from various capital raisings.
Shares in WeBuyCars were trading as high as 20.85 rand, up from its IPO price of 18.75 rand. Van der Walt expressed his optimism about the future, stating, “There is still a lot of space for us to grow. We’re well positioned, we have the tech, we have the people, we have the footprint so we strongly believe that we can double up again in the next five years.”
Since its inception in 2001, WeBuyCars has achieved significant milestones, including launching a public-private partnership with the Road Traffic Management Corporation (RTMC) in 2023. This initiative was aimed at improving vehicle registration and change of ownership processes in South Africa by creating a seamless online method for vehicle dealers and financial institutions to transact directly with Natis, eliminating the need for physical handling of documents and visits to registering authorities.
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WeBuyCars conducts business in three main ways. Firstly, they offer a house call service where employees visit the seller’s home to purchase the vehicle. Secondly, sellers can visit one of WeBuyCars’ many pods set up around the country in places like shopping mall parking lots. Sellers can also go directly to one of the company’s showrooms. Upon receiving a new vehicle, it undergoes a thorough cleaning process and is then assessed for technical faults by Dekra, an independent assessor. Vehicles are rated either A or B, indicating their roadworthiness and finance eligibility.
According to reports, the JSE is planning to list approximately 10 additional companies in 2024. Among these is Cilo Cybin Holdings, a cannabis firm. Other companies slated for listing later in the year include Coca-Cola Beverages Africa, which has been awaiting listing for three years, Boxer owned by Pick n Pay Stores, and Rainbow Chicken, a business under RCL Foods.
This news first appeared on Reuters
