Moove, an African mobility fintech that provides vehicle financing to drivers of ride-hailing platforms like Uber and other gig networks, has raised $78 million in new funding to help expand its operations and investments in the markets it operates, TechCrunch reports.
The company through a statement revealed that the new fund included $28 million in equity from both new and existing investors, led by Mubadala Investment Company, $10 million in venture debt from funds and accounts managed by BlackRock, and $38 million in previously undisclosed funds that were raised over the prior twelve months.
According to the company’s CEO and co-founder, Ladi Delano, the Mubadala-led financing will help Moove double down on already profitable markets, including the UAE, India, UK, and South Africa, “as well as continue to invest in our customer experience and accelerate our product development to deliver group-wide profitability within the next 12 months.”
In retrospect, it could be argued that Moove’s actions over the past couple of months, which have raised eyebrows, were geared towards meeting this target. Moove, which employs 500 people, conducted a company-wide “dismissal” in December, affecting an unknown number of employees.
In May, there were also reports of its drivers embarking on a strike. The strike, which was covered by Technext on its third day, was the drivers’ way of protesting against several injustices and inhumanity allegedly meted to them by the company.
Moove’s investors remain undeterred by these reports. Mubadala, the lead investor, sees their first investment in an African-founded upstart, and their Head of Ventures & Growth, Faris Sohail Al Mazrui, will join Moove’s advisory board.
“Moove has built a highly scalable tech-enabled platform to serve mobility entrepreneurs globally by providing them access to credit and other previously unavailable financial services. This is a hugely underbanked and underserved market that we believe has significant long-term potential,” he said of his firm’s investment in Moove, which also has global backers in Speedinvest and Left Lane Capital.
The latest funding comes a year after Moove raised $105 million in Series A2 financing ($65 million in equity and $40 million in debt). The company has used various types of debt financing since its inception, including funding from British International Investment, Franklin Templeton Investments, and ABSA.
In 2021, the company closed its Series A round, raising $23 million. Moove has raised $325 million ($150 million in equity and over $175 million in debt). This latest financing takes Moove’s valuation to $550 million.
Moove’s ride-hailing financing model
Founded in 2020 in Lagos, Nigeria, by co-CEOs Ladi Delano and Jide Odunsi, Moove, via revenue-based financing, provides flexible options for drivers who want to get into the business of ride-hailing or other gig economy services without having to borrow from car owners or take bank loans to finance these cars bought from dealerships.
Drivers sign up on the platform and, once verified, are trained and sign contracts with the company to access loans to buy or rent cars. The company gets these drivers on Uber (its exclusive partner across Africa for ride-hailing) or other mobility platforms, including Glovo, Kobo360, and Swvl, as gig drivers.
Moove then deducts weekly rental fees from their earnings before transferring the balance to their accounts. The loans are between 12 and 48 months, and when drivers repay them (at an 8% to 13% annual interest rate), they own the cars, according to the three-year-old startup.
As of last year, Moove had expanded to 13 markets in Africa, Europe, the Middle East, and Asia. The startup is headquartered in Amsterdam and has a presence in Nigeria, Egypt, South Africa, Ghana, Kenya, the UK, India, and the UAE.
The company is also one of the first mobility fintech startups that offer sustainable economic opportunities and democratizes access to car financing for gig workers who are mobile.
“We have managed to build a Nigerian solution for what we now know is a global problem,” Delano said. “And that is exciting for us because not only do we have the opportunity to help solve the lack of access to vehicle financing problems for mobility entrepreneurs in Africa, but now we have the opportunity to take this Nigerian-born solution to the rest of the world.”
So far, the company has grown its customer base as over 11 million trips have been completed in Moove-financed vehicles since its launch. It has also provided more avenues with the help of its alternative credit scoring technology, customers who previously may not have been eligible for financial services now have access to auto finance.
