Mecho Autotech, a mobility startup, has secured $2.4 million in pre-series A funding. The company is venturing into wholesale distribution of automotive spare parts in Nigeria.
This move comes because spare part contributes 80% value to Nigeria’s automotive market, valued at $8 billion. Nigerian vehicle owners typically spend around $650 annually on spare parts.
In Nigeria, there are over 12 million registered vehicles, predominantly imported and pre-owned, leading to a fragmented and informal automotive after-sales industry. To address these challenges, Mecho Autotech was founded in April 2021 by Olusegun Owoade and Ayoola Akinkunmi. Mecho operates as a multi-channel platform connecting vehicle owners with vetted technicians across 35 states in Nigeria to improve vehicle maintenance.
This YC-backed startup has secured $2.4 million in pre-Series A funding with participation from Global Brain Corporation, Ventures Platform, and Uncovered Fund. This investment will facilitate the launch of a B2B distribution platform for aftermarket spare parts, representing 80% of Nigeria’s $8 billion automotive industry.
Mecho plans to collaborate with Asian aftermarket spare parts manufacturers to offer affordable spare parts to vendors and workshop owners, particularly high-demand items like tires, suspension parts, brakes, and batteries. The goal is to address spare parts shortages in the market.
Additionally, Mecho intends to provide credit of up to 10 million naira to players in the automotive supply chain. These provision will cater for inventory financing for vendors, working capital for workshop owners, and financing for vehicle maintenance and parts procurement for corporate fleet owners.
Mecho aims to collect data on spare parts demand through dedicated apps for supply chain players. These apps will help gauge market supply and cater to the needs of corporate fleet owners, workshops, and spare parts vendors. The startup plans to launch these apps by the end of the year.
Ventures Platform’s General Partner, Dotun Olowoporoku, expressed confidence in Mecho’s vision to enhance the automotive spare parts supply chain using technology and financing, making quality spare parts more accessible across Nigeria. As of February 2022, Mecho had 40 B2B customers with over 20,000 vehicles, servicing more than 2,000 vehicles and collaborating with over 7,000 third-party mechanics across Lagos.
