[Nigeria] Mobility startup Mecho Autotech raises $2.4M, ventures into wholesale spare parts distribution
Mecho Autotech, a Nigerian mobility startup providing quality automotive spare parts and vehicle repairs and maintenance services, announced today that it closed a $2.4 million pre-Series A investment round. Global Brain Corporation, Ventures Platform, and Uncovered Fund participated in the funding.
Mecho will use the capital to launch a B2B distribution platform for aftermarket spare parts, which accounts for 80% of the value of Nigeria’s $8BN automotive industry. Leveraging its partnerships with aftermarket spare parts manufacturers in Asia, Mecho’s online market space will allow spare parts vendors and workshop owners to buy affordable high-quality spare parts. This will prevent stock-outs of high-demand spare parts like tires, suspension parts, brakes, and batteries. In partnership with local banks, Mecho will also offer credit up to 10 million naira to automotive supply chain players, including inventory financing (vendors), working capital (workshop owners), and financing for vehicle maintenance and parts procurement (corporate fleet owners).
"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,” said Olusegun Owoade, Mecho Autotech CEO/co-founder.
To gauge supply in the market, Mecho will 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. Mecho will also launch an app for spare parts vendors and workshop owners in 4Q23. Workshops will be able to procure spare parts and access working capital. Parts vendors can access inventory financing and manage their inventory sales.
Nigeria's automotive after-sales spare parts and maintenance market is estimated to be $8 billion; spare parts account for 80% of the value with Nigerian vehicle owners spending an estimated $650 annually. With over 12 million registered vehicles of which 90% are imported and pre-owned, the automotive after-sales industry in Nigeria is highly fragmented and informal. This results in a disjointed aftermarket spare parts supply chain.
Commenting on the investment, Hiroto Sorita, Global Brain Corporation Director, said, "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, Ventures Platform General Partner, added, "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."