Mecho Autotech (“Mecho”), a Nigerian company providing quality automotive spare parts and vehicle repairs and maintenance services, announced today that it secured a $2.4 million pre-Series A investment round. Global Brain Corporation, Ventures Platform, and Uncovered Fund participated in the funding.
The investment round saw participation from esteemed backers, including Global Brain Corporation, Ventures Platform, and Uncovered Fund.
This substantial funding injection will enable Mecho Autotech to embark on the launch of a business-to-business (B2B) distribution platform dedicated to aftermarket spare parts. These aftermarket components account for a remarkable 80% of Nigeria’s $8 billion automotive industry.
Mecho Autotech CEO and co-founder, Olusegun Owoade, explained the company’s expanded vision, stating, “In our original business model, our core focus was on vehicle maintenance and repair. But we soon realised a much larger issue—there was an extreme scarcity of high-quality spare parts on the market.”
“Spare parts vendors face frequent stockouts and struggle to access inventory financing. In our marketplace, vendors can source inventory from leading aftermarket spare parts manufacturers and access credit. By solving for spare parts stockouts, we can help solve one of the biggest problems in our industry,’ he adds.
Leveraging its strategic collaborations with aftermarket spare parts manufacturers in Asia, Mecho is set to establish an online marketplace where spare parts vendors and workshop proprietors can access cost-effective, high-quality spare parts.
This groundbreaking initiative aims to curtail shortages of high-demand spare parts such as tires, suspension components, brakes, and batteries. Additionally, in collaboration with local banks, Mecho intends to offer credit facilities of up to 10 million naira to various stakeholders within the automotive supply chain.
These financing options encompass inventory financing for vendors, working capital for workshop owners, and financial support for vehicle maintenance and parts procurement, catering to corporate fleet owners.
Mecho Autotech to launch apps to enhance its operations
Nigeria’s automotive after-sales spare parts and maintenance sector is estimated to be valued at $8 billion, with spare parts representing 80% of this market. Nigerian vehicle owners expend an estimated $650 annually on spare parts. The industry is characterised by over 12 million registered vehicles, of which 90% are imported or pre-owned.
Despite its vast potential, the automotive after-sales industry in Nigeria remains highly fragmented and informal, leading to a disjointed aftermarket spare parts supply chain.
To gauge supply in the market, Mecho will now collect data on spare parts demand through its separate apps tailored to supply chain players. By the end of Q3, Mecho will launch an app for corporate fleet owners, allowing them to discover vetted workshops, access maintenance financing, and manage vehicle maintenance data.
Subsequently, in the fourth quarter of 2023, the company will unveil another app catering to spare parts vendors and workshop owners. Workshops will gain the ability to procure spare parts and access working capital, while parts vendors can tap into inventory financing and manage their inventory sales.
What its investors are saying
Hiroto Sorita, Director at Global Brain Corporation, commented on the investment, saying, “We see a significant opportunity in the growth of the automotive aftersales market in Nigeria. Mecho is led by a strong entrepreneur and team with vast industry experience. Global Brain will support Mecho on parts procurement from Asian suppliers and business development for the new services to penetrate this fragmented market.”
Dotun Olowoporoku, General Partner at Ventures Platform, expressed excitement about Mecho Autotech’s pioneering role in the Nigerian automotive industry, saying, “We are excited to be a part of Mecho Autotech’s journey as they pave the way for innovation in Nigeria’s automotive industry. Mecho’s vision of driving efficiency in the automotive spare parts supply chain through technology and financing aligns perfectly with our market-creating thesis. We are confident in the team’s ability to create significant positive change within the sector and make quality spare parts more accessible for vehicle owners and workshop operators across Nigeria.”
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