Mecho Autotech, a Nigerian startup, has secured $2.4 million in a pre-series A investment to expand into wholesale spare parts distribution. The company offers high-quality automobile replacement parts, car repairs, and maintenance.
Global Brain Corporation, Ventures Platform, and Uncovered Fund contributed to the fundraising. The investment will be used to establish a B2B spare parts distribution business, according to Tech Cabal.
This will be done in collaboration with local banks, and around $12,428 will be available to finance automotive supply chain participants. The objective is to provide a platform for the aftermarket spare parts and maintenance industry, which is estimated to be worth $8 billion.
According to reports, spare components account for 80% of the value. In addition, car owners in Nigeria pay an average of $650 each year. According to research, 90 percent of Nigeria’s approximately 12 million registered vehicles are imported or pre-owned. As a result, Nigeria’s automotive aftermarket is severely fragmented and informal, resulting in a fractured aftermarket spare parts supply chain.
“We see a significant opportunity in the growth of the automotive aftersales market in Nigeria,” Hiroto Sorita, Global Brain Corporation Director, said about the investment. “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.”
According to Tekedia, Mecho Autotech will use its current collaboration with Asian aftermarket spare parts manufacturers to deliver spare parts to vendors and workshop owners at a low cost.
Furthermore, by the end of Q3, the business wants to offer an app for corporate fleet owners to discover workshops, acquire maintenance finance, and manage vehicle data. In Q4, it will also release an app for spare parts dealers and workshop owners.
“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 Olusegun Owoade, Mecho Autotech CEO/co-founder.
So far, the firm has seen over 6,000 cars from B2B and B2C customers undergo repairs and maintenance at over 110 licensed facilities. Three of the outlets are owned by Mecho Autotech.