Egyptian online auto parts marketplace Mtor has raised $2.8 million in pre-seed investment led by MENA-focused venture capital firm Algebra Ventures. Other investors that participated in the round include Dutch Founders Fund (DFF), Aditum Ventures, LoftyInc Capital and other local and global angel investors, the startup said in a statement.

Mtor’s founder and CEO, Mohamed Maged, established the startup in April 2022. His inspiration for the venture emerged from years spent in Germany, where he gained valuable experience in the automotive sector. Upon returning to Egypt in 2020, Maged joined the B2B e-commerce marketplace MaxAB, holding two distinct head of expansion roles before departing to launch Mtor.

In an interview with TechCrunch, Maged described how he recognized a significant challenge in addressing inefficiencies and fragmentation within the auto parts supply chain and the automotive aftermarket, specifically focusing on local workshops and car mechanic spaces. “I got the idea for Mtor before coming to Egypt,” he said. “I worked in automotive a bit and saw the inefficiency of global suppliers knowing nothing about local workshops or local service providers. Egypt itself doesn’t manufacture that many spare parts, so there is a big information and technical gap not only in terms of distribution but in terms of new products.”

Initially, Mtor, whose leadership team includes Maged alongside CTO Khaled Kandil, COO Mohamed Altaf and VP of Strategy Moaz El Megharbel, focused on supplying spare parts to local workshops and managing logistics. Over time, the startup expanded operations, forming partnerships with importers to facilitate distribution in an Egyptian market home to thousands of local service providers and millions of cars needing maintenance and aftersales parts.

Egypt’s automotive after-sales market, among the largest in Africa and the MENA region, exceeds $5 billion in value. With an aging fleet of 8 million vehicles, car owners spend an average of $600+ annually across 35,000 workshops and service providers, emphasizing the untapped potential within Egypt’s automotive after-sales market.

At its core, Mtor addresses the pain points of these local workshops, resolving issues such as inaccurate fitment data, logistics and delivery challenges, parts availability and price transparency. The startup also aims to bridge the gap for car owners facing a dilemma between official dealerships, where prices are two to three times higher, and local workshops offering more affordable options. Despite the potential compromise on quality at local workshops, especially during global economic challenges, Mtor acts as an intermediary, leveraging a tech platform to connect these workshops directly with importers.

Traditionally, importers deliver bulk orders to large wholesalers, who, in turn, distribute to local mechanics through several layers of suppliers. Mtor simplifies this process, offering more efficient pricing than the traditional two-layer supply chain.

“A local mechanic would get the parts from the current supply chain for 10,000 Egyptian pounds but can get it from Mtor for 8,000-8,500 Egyptian pounds because we operate an efficient kind of supply chain from importers to Mtor’s two warehouses in Cairo and Giza and then to these mechanic workshops,” said Maged. “We’re something in between that will uplift those workshops using a tech platform that connects them directly with the importers, and at the same time, giving them better quality and trustable parts that would then give more or less the needed balance between both worlds including providing logistics and delivery of the products on demand.”

The two-year-old online auto parts marketplace operates on a margin model primarily tied to the parts themselves. The business runs on standardized pricing and derives its take rates or margins from this pricing, which includes free delivery.

Over the past year and a half, Mtor has served over 2,500 workshops, fulfilling more than 70,000 orders. On the supply side, it has formed partnerships with over 60 importers.

Beyond being a tech-enabled distribution arm, Mtor establishes a robust feedback loop involving data, parts information and pricing points. Its Mechanic app, targeted at these local workshops, facilitates ordering and provides insights into compatible aftersales parts. The app also manages the redirection of parts, whether to Mtor’s or the importers’ inventory, enhancing efficiency and collaboration within the automotive aftermarket.

Mtor’s focus on B2B customers is a departure from platforms that function as marketplaces connecting car owners with service providers. A notable example is YC-backed Odiggo, an Egyptian startup that initially operated in this category before pivoting to Sully.ai, an AI team specializing in automating healthcare tasks. Similarly, the Nigerian auto deals marketplace Mecho Autotech initially operated as a business-to-consumer marketplace before recently branching into the wholesale distribution of aftersales parts.

While Odiggo’s new business focus and Mecho’s different market positioning make them non-direct competitors, Mtor, according to Maged, doesn’t see other B2C players as competitors, recognizing that serving auto dealers involves more frequent orders and higher return rates compared to direct customers in the spare parts business.

“They merely complement our model because the service providers are the mechanics. The main aim of Mtor is to empower independent workshops to offer car owners excellent quality service at affordable prices. The right way to do this is to empower those mechanics, which will trickle down to a better experience for the car owner not only in lead time but also in the quality of the parts and even the price he pays,” added the CEO.

In addition to recently making hires in leadership and operational roles, Maged says the startup has concentrated on developing products that attract more mechanics monthly. Its future strategy will involve doubling down on this approach off the back of the new investment it has received. He remarked that the startup plans to strengthen partnerships with significant importers and parts suppliers.

“We are delighted to partner with Mtor’s founders and team, who have built an innovative business that solves a significant pain for mechanics, auto parts suppliers and vehicle owners,” said Karim Hussein, managing partner at Algebra Ventures on the investment. “Mtor’s unique visual and voice interface coupled with a sophisticated fitment and parts matching engine eliminates the hours spent daily by mechanics hunting for the right part at the right price. We look forward to supporting Mtor on expansion in Egypt and beyond.”