WeBuyCars is a tremendous success story. Started in 2001 by two brothers, Faan and Dirk van der Walt, it is now a household name and generates billions in revenue.
Buying, fixing, and selling cars are in the brothers’ blood. They started doing it as a hobby while still in school in Bronkhorstspruit.
Faan and his wife went to teach in the UK for two years and, armed with some savings on their return, he partnered with Dirk to expand the business.
Over the next 16 years the company was self-funded with negligible operational debt, despite its rapid expansion.
However, a few years ago WeBuyCars’ further expansion required increasing digitalisation and a bigger cash injection.
They partnered with investment firm Fledge Capital, which provided additional funding and technical and business expertise.
Over time the two brothers sold 40% of WeBuyCars to Fledge Capital.
They described this as a necessary step to digitally transform the business and expand their market share.
For example, until November 2018 much of the business, including its inventory management process, was kept on Excel spreadsheets. Only the buying process was automated.
The additional capital and expertise from Fledge Capital helped to modernise the business and rapidly grow its operations.
Over a 5-year period WeBuyCars opened new vehicle supermarkets in Cape Town, Durban, Midstream, and Johannesburg.
It also expanded its range of services, which now include financing, insurance, tracking, and online auctions.
Today the company has a presence in all nine provinces and the WeBuyCars website attracts 814,000 unique visitors per month.
WeBuyCars’ success attracted the attention of JSE listed Transaction Capital, which bought a non-controlling 49.9% stake in the company for R1.8 billion last year.
Last month, Transaction Capital signed an agreement to increase its shareholding in WeBuyCars from 49.9% to 74.9%.
The remaining 25.1% of the shares in WeBuyCars will be held by the family trusts of the founding shareholders, Faan and Dirk van der Walt.
This transaction was concluded with an initial enterprise value for WeBuyCars of R3.69 billion.
Speaking about his WeBuyCars journey to Biznews, Faan van der Walt said the essence of being an entrepreneur is to never be satisfied with a situation and having the ability to see room for improvement in everything you do.
“Every day when we leave work, we leave the space different to what we found in the morning. It changes overnight for the better,” he said.
“We have these goals, and we work through people. I get a real kick out of trying something new, whether we fail or succeed — but at least we’re trying something and seeing the result.”
“We’ve developed a good gut feel and, usually, it works.”
He said the WeBuyCars process has become a science and it’s fascinating how they price cars, the data sets they’ve developed, and what they can do with the data they have.
“We can start doing smart things and pricing vehicles and working out commission structures for buyers and selling vehicles in different ways, for example,” he said.
His advice to young entrepreneurs and business owners is to stay focused. “We get distracted too soon and people want this instant reward,” van der Walt said.
“WeBuyCars, although people only recognise it now, has been 20 years of grinding,” he said.
“For over a decade, my brother and I did everything. We were the buyers of WeBuyCars. I visited every single suburb every day. I went into people’s homes and learned the hard way.”
It is also important that you love what you do when you start a business.
“If you don’t enjoy what you do or have a passion for it, then you’re dead in the water. So, have a passion for it and be patient,” he said.