Mecho Autotech has closed a US$2.4 million pre-Series A funding round to launch a B2B distribution platform for aftermarket spare parts.
The startup, which raised a US$2.15 million seed funding round in February 2022, has now secured a US$2.4 million pre-Series A round from Global Brain Corporation, Ventures Platform, and Uncovered Fund. Mecho will use the capital to launch a B2B distribution platform for aftermarket spare parts, which accounts for 80% of Nigeria’s US$8 billion value.
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, brakes, and batteries. In partnership with local banks, Mecho will also offer credit up to NGN10 million (US$13,000) to automotive supply chain players, including inventory financing, working capital, and financing for vehicle maintenance and parts procurement.
Olusegun Owoade Mecho, Autotech co-founder and CEO, said: “In our original business model, our core focus was on vehicle maintenance and repair. But we soon realised a much larger issue –an extreme market scarcity of high-quality spare parts. 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.”
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 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.
Hiroto Sorita, Global Brain Corporation director, said: “We see a significant opportunity in the growth of the automotive aftersales market in Nigeria. A strong entrepreneur and team lead, Mecho has 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.”