Mecho Autotech Transitions from Startup Repair to Data Company, Foreseeing $400 Million Annual Revenue

    How Mecho Autotech is Revolutionizing Vehicle Maintenance in Nigeria

    In 2021, Mecho Autotech was launched in Nigeria with a bold mission – to tackle the poor vehicle maintenance culture that plagues the country. The startup aimed to digitize vehicle repair and maintenance by creating a network of technicians across all 35 Nigerian states. However, their journey hasn’t been without challenges.

    Mecho Autotech identified three categories of technicians in Nigeria – the best original equipment manufacturers (OEM), the cheapest roadside technicians, and the independent workshops that fall in between. Of these categories, roadside mechanics make up a whopping 95% of the country’s vehicle technicians. When Mecho Autotech launched, they successfully onboarded 7,000 of these roadside mechanics.

    But the startup soon realized that this move wasn’t as fruitful as they had hoped. The informal nature of roadside mechanics made it incredibly difficult to digitize a service market dominated by them. Even other startups like VConnect, KeyaHelp, and Findworka had struggled to find success in the home service market.

    Despite the challenges, Mecho Autotech has remained committed to their goal of digitizing vehicle repair and maintenance. They recently announced a $2.4 million pre-Series A funding round and expanded their operations into wholesale spare parts distribution. This expansion led many to assume that Mecho Autotech was abandoning its original mission. However, a conversation with Olusegun Owoade, Mecho’s Co-founder and CEO, revealed that their success still relies on their initial value proposition.

    Owoade admitted that connecting technicians to vehicle owners digitally is no easy task. Roadside mechanics dominate Nigeria’s vehicle repairs and maintenance market, while OEM technicians contribute only 1% and independent workshops make up 4%. Mecho Autotech decided to focus on the workshops in between, despite having just 50 of them in their network. Since their launch, they have successfully completed 6,000 maintenance and repair jobs through these workshops.

    However, another challenge surfaced – the unavailability of quality spare parts. This challenge prompted Mecho Autotech’s expansion into spare parts distribution. Owoade explained that 80% of the time, vehicles need new spare parts when they enter a mechanic workshop. When these parts are not readily available, it leads to delays in repairs and dissatisfied customers.

    Mecho Autotech aims to solve this supply chain problem in the spare parts market. The startup realized that most spare parts importers operate in an informal manner, lacking access to financing and unable to ensure a constant supply of quality parts. Mecho Autotech plans to leverage its connections and ability to access finance to capture a piece of the wholesale spare parts market. They have partnered with Global Brain Corporation, a Tokyo-based venture capital firm, to connect with Asian aftermarket parts makers interested in supplying the African market.

    However, Mecho Autotech’s ambitions go beyond being just a spare parts importer and distributor. The startup plans to become a data company. By collecting data on vehicle maintenance, they plan to differentiate themselves from regular spare parts dealers. This wealth of data will provide valuable insights into the needs of vehicle owners, enabling them to offer more targeted services. Mecho Autotech also plans to provide vendors with inventory finance based on this data.

    To support their data collection efforts, Mecho Autotech will launch two apps – one for corporate fleet owners to discover vetted workshops, and another for vendors and workshops to procure spare parts and access financing up to ₦10 million ($12,980). The fleet owners’ app will also serve as a platform to store maintenance data, offering a more organized and visualized approach compared to traditional Excel sheets.

    While Mecho Autotech acknowledges the stumbling blocks they may face, such as the difficulty of trade in Nigeria and the high cost of clearing cargo at seaports, they remain determined. They aim to acquire a 5% market share of Nigeria’s $8 billion spare parts market, which they estimate would generate $400 million in annual revenue.

    In conclusion, Mecho Autotech continues its mission to revolutionize vehicle maintenance in Nigeria. By digitizing repair and maintenance services, as well as addressing the challenges in the spare parts supply chain, they aim to provide quality assurance and standardization to Nigerian vehicle owners. With their expansion into spare parts distribution and their data-driven approach, Mecho Autotech is poised to make a significant impact on the Nigerian automotive industry.

    Latest articles

    Related articles