15 Sep 2023
Mecho Autotech, a mobility startup, has secured $2.4 million in pre-Series A funding and is expanding into Nigeria's automotive spare parts distribution sector. Nigeria's automotive after-sales spare parts and maintenance market is valued at $8 billion, with vehicle owners spending around $650 annually on maintenance and repairs. However, the industry is highly fragmented, leading to supply chain challenges.
Founded in April 2021 by Olusegun Owoade and Ayoola Akinkunmi, Mecho Autotech aims to revolutionize Nigeria's vehicle maintenance culture. The startup has established a network of vetted technicians across 35 states in Nigeria.
The recent funding round saw participation from Global Brain Corporation, Ventures Platform, and Uncovered Fund. This investment will enable Mecho Autotech to launch a B2B distribution platform for aftermarket spare parts, which make up 80% of Nigeria's $8 billion automotive industry.
Mecho Autotech plans to address spare parts stockouts, a significant industry challenge, by leveraging existing partnerships with Asian aftermarket spare parts manufacturers to provide affordable spare parts to vendors and workshops.
Additionally, the startup is collaborating with local banks to offer credit of up to 10 million naira to various automotive supply chain players, including inventory financing for vendors, working capital for workshop owners, and financing for vehicle maintenance and parts procurement for corporate fleet owners.
Mecho Autotech also plans to collect data on spare parts demand through specialized apps tailored to supply chain players. This data will help streamline the spare parts distribution network.
As of February 2022, Mecho Autotech had secured 40 B2B customers who collectively owned over 20,000 vehicles. The startup had serviced more than 2,000 of these vehicles and onboarded over 7,000 third-party mechanics across three workshops in Lagos, serving prominent B2B customers like Shuttlers, Moove, Tolaram Group, and Kobo360.
Mecho Autotech's journey has been marked by remarkable achievements, including a previous $2.15 million seed funding round and participation in the Y Combinator Summer 2021 batch. With this recent funding, the company's total VC funding has reached at least $4.55 million.