Mecho Autotech receives $2.15 million to expand vehicle maintenance and repair services in Nigeria – Techdoxx

Deepak Gupta February 9, 2022
Updated 2022/02/09 at 9:18 AM

Nigeria has more than 12 million vehicles registeredand approximately 90% of them are used cars that need frequent overhauls to avoid recurring breakdowns.

Given this number, one would expect effective vehicle maintenance to be standard in Nigeria.. But this is It’s not the case: Most of the country’s service providers, usually auto mechanics, are inappropriately trained and lack the tools necessary to provide consistent, quality service.

Some startups like Y Combinator supported Autotech Mecho are starting to digitize this process. The company that connects car owners with quality vehicle repair and maintenance providers raised an initial round of $2.15 million.

The company, in a statement, said it will use the capital “to expand its multi-channel fulfillment capability, engineering team and marketing budget for B2C acquisition.”

In Nigeria, retail customers typically have three options for making vehicle repairs: using original equipment manufacturer (OEM) mechanics, semi-organized or aftermarket mechanics, or roadside mechanics. There are very few OEM mechanics like Elizade and Toyota. They provide quality but expensive service because the car parts are manufactured in-house. On the other hand, aftermarket services and roadside mechanics are quite affordable for most vehicle owners, although quality varies; most of the time, it leans towards the faulty end.

Founded by Olusegun Owoade and Ayoola AkinkunmiAutotech Mecho created a network of vetted in-house and third-party mechanics with customer (business and retail customers) accessibility in mind, Owoade told Ploonge. “So what we did was create a network of approved technicians across 35 states in Nigeria to combat the bad culture of vehicle maintenance in Nigeria,” he said.

“We also created an insurance plan because we know that auto insurance is mandatory. So if we have an insurance plan that has an annual maintenance plan built in, it’s more or less replacing that with the aftermarket package people with brand new vehicles. typically take it.”

After-sales packages are automated maintenance plans for new cars. But in a country where most people buy used cars and hit the road with little to no maintenance concerns — which causes long-term repair and safety issues — Mecho Autotech’s proposal is appealing.

Owoade, a consultant for most of his professional career, noticed this problem during his time at Pan-African truck company Kobo360 as chief risk officer. Therehe created a platform to track incidents, including law enforcement stoppages, arrests and accidents. But from the data compiled by Owoade, more than 90% of incidents reported on the platform were due to mechanical failures.

“I became highly interested in the problem trying to understand why, and then I narrowed it down to three main things: quality of the mechanical drivers involved, bad vehicle maintenance culture, and quality of spare parts. Repairs that should have taken a few days would take weeks to complete. complete.”

He approached Akinkunmi, who has 10 years of experience as an automotive engineer and ran a Lagos-based vehicle maintenance company, to start Mecho. They started working on the project in 2019, but it wasn’t fully released until April 2021. The company has entered the YC Summer 2021 batch and currently works with 40 business-to-business customers who own over 20,000 vehicles.. It has serviced more than 2,000 of these vehicles.

Owoade said Mecho Autotech decided to work with enterprise customers first because it gave the company time to adjust its service. He stated that these customers, who have large fleets, typically engage with multiple repair shops and spend over $30 million on annual vehicle repairs and maintenance. But with Mecho Autotech, they are able to deal with a single entity that coordinates these workshops for them..

To date, the company has integrated more than 7,000 outsourced mechanics in three workshops in Lagos serving B2B customers: Shuttlers, Moove, Tolaram Group and Kobo. Charges around 15% commission fees – 10% service fees and 5% spare parts fees.

The company said it is developing a replacement parts value chain that has served more than 100 outsourced mechanics and several large inventory purchases for B2B customers.

Part of the initial money would go to expanding that capacity. It will also help scale Mecho Autotech’s mobile app, 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 yearly subscription fee.

To achieve that scale, the chief executive said that his company has a deal based on success in the Google Play Store, where employ a pay-per-download model in exchange for the platform that pushes the Mecho app. Another strategy is to use mobile services to serve retail customers at your location if they choose not to go to a Mecho Autotech or partner workshops.

“With B2B, what It is necessary is a good network of workshops that has the capacity to meet your needs. And so for B2C, it’s mobile. Consumers want convenience and that’s why mobile services work perfectly good for them,” he said..

“What we’ve done with mobile is we’ve created subscription-based plans for things that customers typically do with your vehicles like routine oil changes, oil filters, brake pads and [then] send our mechanics to your preferred location in our branded minibus when needed. This is how we are trying to structure our supply base tailored to the B2B and B2C side of the business.”

The company said its round was “over 300% overkill” and claims to be the biggest investment to date for a vehicle maintenance startup in Sub-Saharan Africa, mainly because Mecho Autotech operates in a niche market with relatively few competitors. Yetone that comes to mind is Autochek, whose vehicle maintenance services are only an aspect of your comprehensive automotive business.

Investors involved in Mecho’s seed round include Future Africa, HoaQ Capital, Cathexis Ventures, V8 Capital, Silver Squid and Tekedia Capital.

Share this Article
Leave a comment

Leave a Reply

Your email address will not be published.