Nigeria-based mobility startup, Mecho Autotech, has announced securing $2.4m in venture funds which will see it expand its wholesale spare parts distribution business.
The startup, in a statement on Thursday, said it successfully closed the pre-Series A investment round with Global Brain Corporation leading the funding, with support from Ventures Platform, and Uncovered Fund participating in the funding.
The statement said the company would use the capital to launch a B2B distribution platform for aftermarket spare parts, which accounts for 80% of the value of Nigeria’s $8BN automotive industry.
“In our original business model, our core focus was on vehicle maintenance and repair. But we soon realized a much larger issue—there was an extreme scarcity of high-quality spare parts in the market,” Olusegun Owoade, Mecho Autotech’s CEO/Co-founder said.
He added that the funds would enable the startup to leverage its partnerships with aftermarket spare parts manufacturers in Asia, as well as Mecho’s online market space to allow spare parts vendors and workshop owners buy affordable high-quality spare parts.
“This will prevent stock-outs of high-demand spare parts like tires, suspension parts, brakes, and batteries,” he said.
“In partnership with local banks, Mecho will also offer credit up to N10 million to automotive supply chain players, including inventory financing (vendors), working capital (workshop owners), and financing for vehicle maintenance and parts procurement (corporate fleet owners).”
“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,” Owoade added.