Mtor, an Egyptian online marketplace for auto parts, has secured $2.8 million in pre-seed funding led by Algebra Ventures, a venture capital firm with a focus on Egypt. The round also saw participation from Dutch Founders Fund (DFF), Aditum Ventures, LoftyInc Capital, and various other local and international angel investors, according to the startup’s statement.
Mohamed Maged, founder and CEO of Mtor, launched the startup in April 2022. His inspiration for the venture came from his time in Germany, where he gained significant insights into the automotive industry. Upon his return to Egypt in 2020, Maged joined the B2B e-commerce marketplace MaxAB and held two different head of expansion positions before leaving to establish Mtor.
In a TechCrunch interview, Maged detailed how he identified a substantial challenge in addressing the inefficiencies and fragmentation within the auto parts supply chain and the automotive aftermarket, particularly in local car workshops.
I conceived the idea for Mtor before coming to Egypt. I briefly worked in the automotive industry and noticed the inefficiency of global suppliers who knew nothing about local workshops or service providers. Egypt doesn’t manufacture many spare parts, creating a significant information and technical gap, not only in distribution but also regarding new products.
Mohamed Maged
Initially, Mtor, whose leadership team comprises Maged, CTO Khaled Kandil, COO Mohamed Altaf, and VP of Strategy Moaz El Megharbel, concentrated on providing spare parts to local workshops and handling logistics. Gradually, the startup broadened its operations, forging alliances with importers to streamline distribution in the Egyptian market, which boasts thousands of local service providers and millions of cars requiring maintenance and aftersales parts.
Egypt’s automotive after-sales market is one of the biggest in Africa and the MENA region, with a value exceeding $5 billion. Given Egypt’s aging fleet of 8 million vehicles, car owners spend an average of $600+ annually across 35,000 workshops and service providers, underscoring the considerable untapped potential within Egypt’s automotive after-sales market.
Fundamentally, Mtor seeks to alleviate the challenges faced by these local workshops, addressing issues such as inaccurate fitment data, logistics and delivery difficulties, parts availability and price transparency. The startup also strives to close the gap for car owners conflicted between official dealerships, which charge two to three times more, and local workshops offering more economical alternatives. Although the quality at local workshops might fall short, particularly during global economic difficulties, Mtor steps in as a mediator, using a tech platform to link these workshops directly with importers.
Conventionally, importers deliver large orders to major wholesalers, who then distribute to local mechanics via numerous layers of suppliers. Mtor streamlines this process, presenting more efficient pricing than the typical two-layer supply chain.
A local mechanic could acquire parts from the existing supply chain for 10,000 Egyptian pounds, but they could get it from Mtor for 8,000-8,500 Egyptian pounds because we facilitate a more efficient supply chain from importers to Mtor’s two warehouses in Cairo and Giza, and then to these mechanic workshops. We serve as a mediator that elevates these workshops by leveraging a tech platform to connect them directly with importers while ensuring better quality, reliable parts, thus striking a balance between both worlds, including offering on-demand logistics and product delivery.
Mohamed Maged
Primarily relying on parts, Mtor, a two-year-old online auto parts marketplace, operates on a margin model. The business applies standardized pricing and yields its take rates or margins from this pricing, which includes free delivery.
In the last year and a half, Mtor has catered to over 2,500 workshops, fulfilling more than 70,000 orders. On the supplier end, it has established partnerships with over 60 importers.
In addition to being a tech-aided distribution division, Mtor sets up a solid feedback loop incorporating data, parts information, and pricing points. Its Mechanic app, intended for local workshops, simplifies ordering and delivers insights into compatible aftersales parts. The app also oversees the rerouting of parts to either Mtor’s or the importers’ inventory, boosting efficiency and collaboration within the automotive aftermarket.
Mtor’s B2B customer focus differentiates it from platforms functioning as marketplaces connecting car owners with service providers. A prominent example is YC-backed Odiggo, an Egyptian startup that initially operated in this sector before transitioning to Sully.ai, an AI team specializing in automating healthcare tasks. Similarly, the Nigerian auto deals marketplace Mecho Autotech originally functioned as a business-to-consumer platform before recently expanding into wholesale distribution of aftersales parts.
