Mecho Autotech, an automotive startup from Nigeria specializing in high-quality spare parts, vehicle servicing, and repairs, has successfully garnered $2.4 million in its recent pre-Series A funding round. This round saw Global Brain Corporation, Ventures Platform, and Uncovered Fund contributions.
The fund raised will be channeled towards introducing a B2B platform for spare parts distribution. Collaborating with domestic banks, Mecho Autotech plans to extend financing of up to ₦10 million ($13,428) to stakeholders in the automotive supply chain. Using custom software solutions, they aim to shape a demand-centric ecosystem for Nigeria’s automotive post-sales market, estimated at $8 billion.
Earlier in February 2022, the startup had procured $2.15 million in seed funds to broaden its vehicle servicing offerings. However, they soon recognized a prevalent issue – the country’s lack of spare parts. This recent pre-Series A fund of $2.4 million equips the startup to tap into Nigeria’s yearly expenditure of $10 billion on imported vehicle spare parts.
Hiroto Sorita, a Director at Global Brain Corporation, expressed his views on the investment, highlighting the potential growth of Nigeria’s automotive post-sales market. He praised Mecho’s leadership and team for their extensive industry knowledge. He assured Global Brain’s assistance procuring parts from Asian suppliers and expanding business to infiltrate this segmented market.
Mecho, capitalizing on its ties with aftermarket spare parts producers in Asia, will inaugurate an online platform enabling spare parts sellers and workshop proprietors to purchase cost-effective, superior-quality spare parts. By the conclusion of Q3, the company intends to roll out an application for corporate vehicle fleet owners, facilitating workshop discovery, maintenance financing, and vehicle data management. An app tailored for spare parts sellers and workshop owners is also slated for a 4Q23 release.
Olusegun Owoade, the CEO and co-founder of Mecho Autotech, reflected on their initial business strategy, which was predominantly centered on vehicle servicing and repairs. The realization of a more pressing concern – the acute shortage of top-tier spare parts in the market – led to a shift in focus. He emphasized the challenges spare parts sellers face, such as frequent stock shortages and difficulties obtaining inventory financing. Vendors can procure inventory from leading aftermarket spare parts manufacturers through their platform and avail credit facilities. By addressing the issue of spare parts shortages, they aim to tackle one of the industry’s most pressing challenges.