Mecho Autotech, a Nigerian on-demand auto repair and maintenance startup, has raised a $2.15 million seed round.
The Investors in the seed round include Future Africa, HoaQ Capital, Cathexis Ventures, V8 Capital, Silver Squid and Tekedia Capital.
Founded by Olusegun Owoade and Ayoola Akinkunmi in 2021, Mecho Autotech has created a network of vetted in-house and third-party mechanics with customer affordability in mind. Currently, Mecho Autotech has vetted technicians across 35 Nigerian states to tackle the poor vehicle maintenance culture in Nigeria.
The investment will be used to expand its multi-channel service capacity, engineering team, and marketing budget for B2C acquisition.
The company said it 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.
Part of the seed money would go into expanding this capacity. It will also help scale Mecho Autotech’s mobile application, which it launched for its B2C customers last month. The two-year-old startup said it aims to reach 25,000 customers this year and charge them a monthly, quarterly or annual subscription fee. The startup has created an insurance plan because motor insurance is compulsory.
To date, the company has onboarded over 7,000 third-party mechanics across three workshops in Lagos servicing B2B customers: Shuttlers, Moove, Tolaram Group and Kobo. It charges about 15% commission fees –10% from service charges and 5% from spare parts charges.
The company said its round was “oversubscribed by over 300%” and claims to be the largest investment to date for a vehicle maintenance startup in sub-Saharan Africa.
Commenting, Owoade said: ”We’re going to double down on our mission to give Nigerians access to easy, affordable, and high-quality vehicle maintenance. If Nigerians can regularly service their cars and trucks, they will avoid costly repairs and save money in the long run.”
He added: “I became highly interested in the problem trying to understand why, and then I narrowed that down to three key things: quality of mechanics drivers engaged, poor vehicle maintenance culture, and quality of spare parts. Repairs that are supposed to take a few days would take weeks to complete.”
On the mobile app, Owoade said: “What we’ve done with mobile is that we’ve created subscription-based plans for things customers would typically do with their vehicles like the routine oil change, oil filters, brake pads and [then] send our mechanics to their preferred location in our branded minibus when need be. This is how we are trying to structure our supply base tailored towards B2B and the B2C side of the business.”
