Mecho Autotech, a mobility startup from Nigeria announced the successful closure of a pre-Series A investment round of $2.4 million in funding through the participation of Global Brain Corporation, Ventures Platform, and Uncovered Fund.
Nigeria’s automotive aftermarket for spare parts and maintenance services is valued at $8 billion, with spare parts alone constituting a substantial 80% of this total worth.
Nigerian vehicle owners collectively expend an estimated $650 annually in pursuit of maintaining their vehicles. The landscape is characterized by the presence of over 12 million registered vehicles, a significant majority of which, approximately 90%, are imported and pre-owned.
However, the automotive aftermarket in Nigeria operates in a highly fragmented and predominantly informal manner.
This fragmentation contributes to a disjointed supply chain for aftermarket spare parts, underscoring the need for innovative solutions such as Mecho’s digital platforms to bridge the gaps and foster greater efficiency within the industry.
How the funds will be used
With this infusion of capital, Mecho will embark on the launch of a B2B distribution platform catering to aftermarket spare parts. This sector represents 80% of the total worth of Nigeria’s robust $8 billion automotive industry.
According to Mecho, it draws its strength from alliances with manufacturers of aftermarket spare parts in Asia and intends to carve out an online marketplace that empowers spare parts vendors and workshop proprietors to procure affordable spare parts.
This initiative is designed to address the perennial issue of stock shortages, particularly in high-demand spare parts such as tires, suspension components, brakes, and batteries.
Beyond the digital marketplace, Mecho also intends to collaborate closely with local financial institutions.
This collaboration will facilitate the provision of credit to key players within the automotive supply chain, including vendors who require inventory financing, workshop owners in need of working capital, and corporate fleet owners seeking financial assistance for vehicle maintenance and parts procurement.
Nairametrics learns that credit lines of up to 10 million naira will be extended to empower these vital segments of the automotive ecosystem, thereby fostering growth and innovation within the industry.
What he said
Olusegun Owoade, Mecho Autotech CEO/co-founder said,
- “In our original business model, our core focus was on vehicle maintenance and repair. But we soon realized a much larger issue—there was an extreme scarcity of high-quality spare parts in 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”.
Speaking of plans, Mecho also aims to gather invaluable data about spare parts demand through a series of dedicated applications tailored to cater to various supply chain stakeholders.
Owoade noted that at the end of the third quarter, Mecho will unveil a specialized application designed exclusively for corporate fleet owners to enable them to identify accredited workshops, secure financing for maintenance needs, and efficiently manage crucial vehicle maintenance records.
