Nigerian vehicle repair and maintenance startup, Mecho Autotech has announced that it has closed a $2.15 million seed investment. The startup which is a Y Combinator-backed startup had Future Africa, Hoaq Capital, Cathexis Ventures, V8 Capital, Silver Squid and Tekedia Capital participating in the round. The round, oversubscribed by 300% is the largest investment till date for a vehicle maintenance startup in sub-Saharan Africa.
The company will use the funds raised to expand its multi-channrl service capacity, engineering team and marketing budget for a B2C acquisition.
Mecho Autotech operates a digital platform that connects B2B and B2C customers with its in-house mechanics as well as third-party mechanics. Its in-house capacity consists of workshops, known as Mecho Shops, and Mecho Mobile operations.
The Company has onboarded over 7,000 third-party mechanics to the platform with workshop and mobile operations. Founded in 2021 by Olusegun Owoade and Ayoola Akinkunmi, Mecho Autotech is a multi-channel platform for auto repair and maintenance in Nigeria.
The company’s mission statement is to foster a vehicle maintenance culture in Nigeria to keep roads and passengers safe. To this effect, Mecho seeks to address the large and difficult task of servicing corporate fleets, Mecho has built three Mecho Shops across Lagos and will continue to expand this capacity.Since launch in April 2021, the Company’s B2B customers include some of Nigeria’s largest corporate fleets including Uber partner Moove, Tolaram Group, and UAC Group with several other notable SLAs in progress.
In addition to the growing B2B revenue base, Mecho has expanded into service for B2C customers with the launch of its B2C app in January. The Company targets to grow in B2C via a subscription service model and individual service requests with a target of 25,000 customers this year.Moreover, Mecho is developing a spare parts value chain which has already served over 100 third-party mechanics and several large ticket inventory purchases for B2B customers.
Africa’s automotive repair and maintenance industry is noted to be highly fragmented, undercapitalized, and fraught with poor service outcomes due in part to misaligned incentives. Nigeria, Africa’s most populated country has over 12 million registered vehicles, and owners spend an average of $650 per year on maintenance and repairs. Approximately 90% of Nigeria’s car market consists of used vehicles with only 5% of car sales financed. Despite the sheer number of used cars on Nigeria’s roads which require check-ups to prevent breakdowns, regular vehicle maintenance is uncommon. Existing service providers, the majority of whom are not formally trained and lack sufficient tools and equipment, are often inefficient and provide inconsistent service quality.
Speaking on the investment, Olusegun Owoade, Mecho Autotech CEO/co-founder said, “When you consider the state of Nigeria’s used cars and our roads, car maintenance isn’t optional. We want to automate high-quality vehicle repair and maintenance for Nigerians by making it easy, convenient, and affordable. We aspire to build a maintenance culture in Nigeria and beyond to keep roads and people safe”.
Iyinoluwa Aboyeji, Future Africa, Founder and General Partner added, “At Future Africa, our thesis is to back founders solving hard problems in large markets. With over 12 million cars on our roads and more on the way, leveraging technology to bring order to vehicle maintenance and repair is overdue. We are delighted to work with the Mecho Autotech team as they brilliantly execute on building out the vehicle repair value chain across Africa and create new and decent highly skilled auto repair jobs”.
