NIGERIA – Nigerian vehicle repair and maintenance startup Mecho Autotech has raised a US$2.15 million seed funding round to expand its capacities and acquire more customers.
The latest funding round featured participation from Future Africa, Hoaq Capital, Cathexis Ventures, V8 Capital, Silver Squid, and Tekedia Capital.
The round was oversubscribed by over 300 percent. Mecho Autotech will use the capital to expand its multi-channel service capacity, engineering team, and marketing budget for B2C acquisition.
Founded in 2021 by Olusegun Owoade and Ayoola Akinkunmi, Mecho Autotech offers repair and maintenance services to businesses and consumers through in-house and third-party service capacity.
The company has both workshop (Mecho Shops) and mobile service (Mecho Mobile) capabilities and has so far onboarded over 7,000 third-party mechanics to its platform.
The startup has so far built three Mecho Shops across Lagos and will continue to expand this capacity.
Mecho’s B2B customers include some of Nigeria’s largest corporate fleets including Uber partner Moove, Tolaram Group, and UAC Group, while the startup aims to grow in B2C via a subscription service model and individual service requests.
The startup is developing a spare parts value chain that has already served over 100 third-party mechanics and several large ticket inventory purchases for B2B customers.
“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,” Owoade said.
Africa’s automotive repair and maintenance industry are highly fragmented, undercapitalized, and fraught with poor service outcomes due in part to misaligned incentives.
Nigeria has over 12 million registered vehicles, and owners spend an average of US$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.
Liked this article? Subscribe to DealStreet Africa News, our regular email newsletter with the latest news, deals, and insights from Africa’s business, economy, and more. SUBSCRIBE
