Nigeria’s Mecho Autotech raised $2.4 M Pre-Series A funding for B2B distribution platform
Nigeria’s Mecho Autotech has closed a US $2.4 million pre-Series A funding round to start a B2B distribution platform for aftermarket spare parts. Mecho Autotech offers high-quality automotive spare parts as well as vehicle repairs and maintenance services.
Olusegun Owoade and Ayoola Akinkunmi founded Mecho Autotech in 2021 to provide businesses and consumers with repair and maintenance services through in-house and third-party service capacity that has passed rigorous assessments.
Global Brain Corporation, Ventures Platform, and Uncovered Fund have contributed US $2.4 million to the startup, which had previously raised US $2.15 million in a seed funding round in February 2022. Mecho will use the funding to start a B2B distribution platform for aftermarket spare parts, which make up 80% of Nigeria’s US $8 billion worth of exports.
Mecho’s online market space will enable spare parts vendors and workshop owners to buy inexpensive high-quality spare parts by leveraging its partnerships with aftermarket spare parts manufacturers in Asia. Stock-outs of essential spare parts, such as tires, suspension components, brakes, and batteries, will be avoided as a result. Mecho will also provide credit up to NGN10 million (US $13,000) to participants in the automotive supply chain, including working capital, inventory financing, and financing for vehicle maintenance and part purchases.
“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 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 Owoade.
Mecho will use its unique apps made for supply chain participants to gather information on spare parts demand in order to determine the market’s supply. Mecho will release an app by the end of Q3 that will enable corporate fleet owners to find vetted workshops, get maintenance financing, and manage vehicle maintenance data. In 4Q23, Mecho will also release an app for suppliers of spare parts and workshop proprietors. Workshops will have access to working capital and the ability to buy replacement parts. Vendors of parts can manage their inventory sales and access financing for their inventory.
“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,” said Hiroto Sorita, Global Brain Corporation director.
