The Nigerian used car industry is currently growing exponentially, and it’s good to know that a lot of people can get vehicles they can afford.
But with that said, I’m afraid not all the mechanics working on these cars are properly trained. One study estimated that only 30% of the technicians in Nigeria are considered to be highly skilled and able to work on modern cars.
The good news is this, Autotech firms have risen in popularity to solve these problems, and investors are not taking chances.
A few businesses, such as Mecho Autotech, which is supported by Y Combinator, are starting to digitize this procedure.
A $2.15 million seed round has been obtained for the firm that connects automobile owners with reputable automotive repair and maintenance providers.
The funds will be used to grow its multi-channel quality of service delivery, engineering team, and marketing budget for B2C recruitment, according to the startup.
Future Africa, HoaQ Capital, Cathexis Ventures, V8 Capital, Silver Squid, and Tekedia Capital were among the investors in Mecho’s seed round.
Mecho Autotech, founded by Olusegun Owoade and Ayoola Akinkunmi, has set up a network of verified in-house and third-party mechanics with the accessibility of businesses and retail customers in mind. According to Owoade, the startup built a network of verified technicians across 35 states in Nigeria to address the country’s poor car maintenance culture.
Also read, Ingressive Capital partners Mecho Autotech to promote Automobile Technology in Nigeria
Because motor insurance is required, the startup also claimed to have developed an insurance policy. So, if an insurance policy includes an annual maintenance plan, it effectively replaces the after-sales package that people with brand new cars typically receive.
New automobile after-sales packages are automated maintenance programs. However, in a country where the majority of people buy used automobiles and drive them off the lot with little or no care for maintenance, Mecho Autotech’s proposal is intriguing.
They began work on the project in 2019, however, it was not completed until April 2021. The startup was accepted into the YC Summer 2021 batch and already works with 40 B2B customers who possess over 20,000 automobiles. Over 2,000 of these automobiles have been serviced.
Mecho Autotech chose to engage with commercial customers first, according to Owoade, since it allowed the firm to fine-tune its service.
He explained that these customers, who own huge fleets, usually collaborate with many workshops and spend more than $30 million on car repairs and maintenance each year.
However, with Mecho Autotech, they will deal with a single company that will coordinate all of their workshops.
It is important to note that Nigeria’s automobile sector has yet to reach its full potential, as most of the country’s wants and requirements are currently satisfied by second-hand vehicles.
While this helps to alleviate Nigeria’s long-awaited demand glut, it just adds to the demand for well-trained mechanics.
While there are a few car firms in Africa that sell cars, many Africans still lack access to the mechanics, technology, and parts they need to keep their vehicles in good working order.
Autotech businesses like Mecho, hopefully, will be able to have a positive impact on Africa’s auto repair scene by making it easier for both consumers and car manufacturers to service their vehicles.
Over 7,000 third-party mechanics have been onboarded by the Mecho across three workplaces in Lagos that serve B2B customers: Shuttlers, Moove, Tolaram Group, and Kobo
It charges a 15% commission fee, with 10% coming from service fees and 5% from spare parts charges.
According to the startup, it is establishing a spare parts value chain that has already supplied over 100 third-party mechanics as well as many large-ticket inventory acquisitions for B2B customers.
A portion of the seed money would be used to increase this capability. It will also aid in the scaling of Mecho Autotech’s mobile application, which was introduced last month for its B2C customers.
The two-year-old company says it wants to reach 25,000 users this year and will charge them a monthly, quarterly, or annual subscription fee.
Since Mecho Autotech operates in a niche industry with few competitors, the business believes that its round was “oversubscribed by over 300 percent.”
It also remains the largest investment to date for a car servicing company in Sub-Saharan Africa. One that comes to mind is Autochek, whose vehicle maintenance services are just one facet of the company’s all-encompassing automotive business.
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