Source Code Capital Portfolio Company Mannkando Raises Nearly $10 Million in Pre-A Round, with Source Code Capital Continuing to Increase Its Stake

源码资本·September 9, 2021·0·6

Supply chain advantages were scaled up further through deep partnerships with nearly 200 premium European repair shops.

Mannkando, an automotive aftermarket company expanding overseas, announced the completion of a nearly $10 million Pre-A funding round. The round was led by BAI Capital, with Unity Ventures participating, and Source Code Capital, the lead investor from the angel round, continued to increase its stake.

Mannkando adopts an integrated model combining offline frontline service points with an online e-commerce platform, creating a connected path for auto parts sales and repair services. The company has built out digital infrastructure including the auto parts e-commerce platform Mannkando Portal, the store and warehouse management system E-shop, and the repair shop management SaaS system MannService. It currently operates nearly 200 offline frontline service locations.

Europe offers fertile ground for automotive aftermarket development. Data shows that Europe has extremely high vehicle ownership. Mannkando's core market, Russia, currently has 53.36 million vehicles in operation. The average age of vehicles in use is 13.4 years (compared to under five years in China), with vehicles older than ten years accounting for 59% of the total. Used car sales growth significantly outpaces new car sales growth, and vehicle maintenance and repair frequency is high — a textbook mature market.

According to Market Data Forecast projections, the European automotive aftermarket reached $256 billion in 2021, with a compound annual growth rate of 3.1%, and is expected to reach $369.2 billion by 2026.

Benefiting from years of OEM experience for European and American international brands, Chinese auto parts manufacturers have developed highly mature supply chain systems capable of providing diverse, cost-effective parts. From a supply chain perspective, Mannkando partners with high-quality domestic upstream suppliers, delivering products directly to European consumers. This improves supply-demand matching efficiency while also boosting gross margins. In contrast, most independent aftermarket players in Europe remain traditional distributors, with auto parts passing through multiple layers of markup from brand manufacturers to consumers, resulting in low distributor gross margins.

Low concentration at both ends of the supply chain and high margins in distribution channels signal significant potential for economies of scale. Mannkando's revenue in 2021 is projected to grow nearly tenfold year-over-year. The core drivers of this rapid growth differ from traditional companies — they stem from the further acceleration of e-commerce penetration under Europe's new normal of pandemic conditions, Mannkando's expansion of offline frontline service points driven by digital tools to enhance customer experience, and the further scaling of supply chain advantages. As revenue continues to grow, gross margins are expected to improve further.

Since its founding, the company has made notable progress in fulfillment infrastructure, digitization, and team building. On the fulfillment side, it has established deep partnerships with nearly 200 high-quality European repair shops. Digitally, it has built its own App platform while optimizing existing data platforms. On the team front, founder and CEO Alishir comes from Huawei's overseas operations, with over ten years of overseas marketing and management experience, fluency in five foreign languages, and deep understanding and sharp insight into the automotive aftermarket and overseas markets. His strong resource integration and talent aggregation capabilities have brought in multiple outstanding professionals from internet e-commerce and automotive aftermarket companies, with experience at Uber and leading European tech companies including Yandex, Autodoc, and Ozon. The team has expanded to around 150 people.

Going forward, beyond continuing to expand in the European market, Mannkando plans to broaden its business from both auto parts and repair services — upgrading logistics infrastructure, developing specialized SaaS systems for the auto parts industry, introducing auto insurance products, and further improving service efficiency and quality.

As the lead investor in the company's angel round, Fuqiang Guan of Source Code Capital stated: "The Mannkando team is an exceptionally scarce, high-quality team in the supply chain globalization space, with outstanding strategic vision and execution capability. They are not only able to deeply build end-to-end supply chain fulfillment service systems that substantially improve operational efficiency across the entire chain, but also execute efficiently to achieve nearly tenfold year-over-year revenue growth. Source Code believes Mannkando has the ability to continuously push boundaries, leveraging multidimensional advantages in digitalization and localization to maintain strong momentum in the European automotive aftermarket."