Company: KARO
Filing Date: 2025-06-09
Form Type: 20-F
Source: 0001213900-25-052372
Chunk: 3

Company: Karooooo Ltd.
Filing Date: 2025-06-09
Form: 20-F
Item: Item 3
Chunk 3
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 marketing campaigns, our ability to generate leads, our relationships with channel partners, price and service competition,
general economic conditions and, in the case of our safety and security services, the real and perceived threat of vehicle theft and discounts
offered by insurers for risk mitigation.

Selling to consumers or sole
proprietors and small business customers may, in some instances, be more difficult than selling to medium-sized businesses and large enterprise
customers. Consumers and sole proprietors and small businesses may have higher default rates, are price sensitive, may be difficult to
reach with targeted sales campaigns and may have higher churn rates, in part because of the scale of their businesses and the ease of
switching solutions.

On the other hand, the typical
sales cycle for medium-sized businesses and larger enterprises may be longer than that of our consumer, sole proprietor and small business
customers. These customers may have more complex business, operational, procurement, integration and contractual requirements and their
scale may result in less favorable contract terms. Our sales cycle runs from lead generation to the installation of the device. Our typical
sales cycle for large enterprises ranges from 3 to 24 months. Medium enterprise sales cycles run between 1 to 8 months with small business
and sole proprietor sale cycles running between 1 to 90 days. The consumer sales cycle runs between 1 and 60 days. A number of factors
influence the length and variability of our sales cycle, including the need to educate potential customers about the uses and benefits
of our solutions, the discretionary nature of purchasing and budget cycles, and the competitive nature of evaluation and purchasing approval
processes. It may be difficult for us to predict the timing of when we will enter into subscription contracts with medium-sized businesses
and large enterprises and how quickly such contracts can be implemented. This could make the timing of our revenues uncertain and difficult
to predict.

We may not be able to retain
or drive margin expansion with our existing customers, which could adversely affect our financial results.

We generally sell our SaaS platform
services pursuant to subscription agreements with an initial minimum term of 36 months. The majority of these agreements provide for automatic
renewal on a month-to-month basis thereafter unless the customer elects otherwise. Our customers have no obligation to renew all or any
of these agreements after the expiration of the initial term or any renewal term. If our efforts to satisfy our existing customers are
not successful, we may not be able to retain them or expand our relationship with them and,