Carzaty

Carzaty was an online automotive retailer operating in the Gulf Cooperation Council region, selling new and "assured" used cars through a digital-first, omnichannel model. Customers could search, compare, buy and finance cars online, with vehicles in inventory reconditioned to defined quality standards and sold with warranties. The company positioned its model as a replacement for large, high-overhead physical showrooms, stating that the reduced cost base allowed it to price cars up to 25 per cent below traditional dealers, while still operating limited retail points such as a shop at Dubai World Trade Centre.

A central element of the business was a proprietary pricing database built from public sources, covering both current listings and price history for specific models. The founders described this as a response to the lack of transparent used-car pricing benchmarks in the region, which they said constrained floor-plan (inventory) financing and exposed retailers to mispricing and fraud. The wider technology stack was built around this pricing data.

The business was asset-heavy relative to typical software startups, holding vehicle inventory, and the founders reported that most regional venture capital firms declined to invest on the grounds of the capital intensity and growth rate. Funding instead came from family offices with automotive interests, a US-based hedge fund, a state-linked Omani investor and asset-backed Shariah-compliant debt.

Founding story

Carzaty was founded by Hassan Jaffar and Marwan Chaar, whose backgrounds included McKinsey & Company, Stanford University and Harvard University. Sources give the founding year as 2017 (Forbes Middle East, Doha Tech Angels) and as 2018 in Oman (Wamda). The founders stated that from the outset they targeted a trade sale rather than an IPO, aiming for an acquisition value above $100 million by a regional automotive group or an international used-car company entering the GCC, and selected investors aligned with that strategy.

Business model

Direct online retail of new and used vehicles: Carzaty acquired, reconditioned and held car inventory and sold it to consumers through its digital platform and a small number of retail locations, also offering financing. Because the model required carrying inventory, it depended on floor-plan style debt financing, including an asset-backed, Shariah-compliant facility secured against stock.

Revenue came from the margin on vehicles sold through the platform, with the founders emphasising unit economics and a path to profitability; car financing was also offered to buyers.

Traction

The company reported selling hundreds of cars by December 2019. Headcount grew from about 30 people at the time of acquisition to 120 employees, with a further 80 hires anticipated under Kavak, which committed $130 million to its GCC operations.

Latest developments

Following the October 2022 acquisition, Carzaty's operations were folded into Kavak's GCC business, which received $130 million of investment from Kavak; headcount reached 120 with 80 further hires planned. Co-founders Hassan Jaffar and Marwan Chaar continued in roles at Kavak and published reflections on their exit strategy in 2023.