Used-car platform Checar raises 2.5 billion won in pre-Series A funding

Chekka Inc. said on the 31st that it had raised 2.5 billion won in a pre-Series A round from investors including Lotte Ventures and KB Securities.

Chekka CEO Hyojin Ahn is a former Samsung Electronics researcher who built her career at foreign automakers including BMW. In 2017, she founded the company and created “Chekka,” Korea’s first integrated certification and reconditioning platform for used cars. The name, which is also the company and service name, combines “check” and “car” to mean checking a car multiple times.

Chekka’s integrated certification center is a large facility with a total area of about 5,461 square meters (about 1,655 pyeong) and capacity for more than 1,000 vehicles a month. It handles pre-delivery inspections (PDI) from the time a used car is acquired until it is delivered to the consumer. The center is equipped for warranty inspections, performance inspections by the Korea General Performance Evaluation Institute, painting and bodywork, wheel, glass and interior restoration, car washing, interior cleaning, consumables replacement, and polishing. Its digital automatic studio also enables vehicles to be listed online in one step, allowing the center to handle the entire reconditioning process. Chekka currently operates a network centered on its directly managed Suwon center, with locations in Seongdong, Yangjae and Incheon. It performs inspections and reconditioning for more than 800 certified used cars from imported brands each month, on average.

Chekka is also building a “new-concept parking tower” on a site in front of its integrated certification center in Yeongtong-gu, Suwon, Gyeonggi Province. Targeting completion in the second half of 2021, the project will introduce Korea’s first “used-car vending machine.” Consumers will be able to shop for used cars certified by Chekka on their mobile devices and collect them directly from the vending machine. With no intermediary distribution margins, buyers can purchase cars at reasonable prices.

One example of innovation in overseas used-car distribution is U.S.-based Carvana, often called the Amazon of the used-car industry. A company representative said Chekka stands apart by being the first in Korea to benchmark this model and by operating an integrated certification center for quality improvement and warranties—a vital step in used-car distribution—rather than simply providing an online-to-offline used-car sales platform. The company is also introducing used-car vending machines and a mobile operating system to make distribution more efficient, ahead of the market.

Won Jitaek, senior investment manager at Lotte Ventures, the lead investor, said, “The Korean used-car market sees about 3.77 million transactions a year, twice the size of the new-car market, which has 1.8 million. I believe the one-stop reconditioning process at Chekka’s integrated certification center, which reduces time and costs and maximizes efficiency, is exactly what today’s used-car market needs.” He added, “The used-car market has yet to shed its reputation as a ‘lemon market,’ with severe information asymmetry between sellers and buyers. We have high hopes that Chekka’s speed of execution and new service model can transform Korea’s used-car market.”

Chekka CEO Hyojin Ahn said, “This investment is about more than raising funds; it is an opportunity to build a network that will support the growth of our corporate value.” She added, “Investment from Lotte Ventures, KB Securities and others lays the groundwork for expanding financial and insurance partnerships in the used-car sector. We will use this to accelerate the development of peer-to-peer used-car products and our growth as an innovative used-car distribution platform.”