Moove’s Massive Round Shines Light on ‘Mobility Fintech’
Lagos-based startup raises $105M A2 round to scale up its revenue-based financing model for Africa's 'mobility entrepreneurs'
Keywords: fintech, mobility, startups, funding
Back in August, we wrote about Moove, a ‘mobility fintech’ focused on helping ride-hailing drivers use their revenue stream to purchase their vehicles, raising a then impressive $23 million Series A round.
At the time we thought Moove represented another example of an African fintech applying creativity to solve the vexing problem of providing capital to those without traditional credit histories.
Investors apparently agree and have invested another $105 million in Moove in a Series A2 round announced today.
The round was led by existing investors Speedinvest, Left Lane Capital, and thelatest.ventures. New investors joining the round include AfricInvest, MUFG Innovation Partners, Latitude, and Kreos Capital.
Since we wrote about Moove in August, the company has added five new strategic partners, added two new vehicle classes (trucks and bikes), expanded into delivery, and grown operations from three to six African cities (Lagos, Accra, Johannesburg, Cape Town, Nairobi, and Ibadan). That is in addition to its massive new round.
Since its 2019 launch, more than 3 million trips have been completed in Moove-financed vehicles across Africa, according to the company.
Moove, as with other fintechs focused on small businesses, began by addressing a specific pain point. Without access to capital, solopreneurs and small businesses will remain small, and struggle to eke out a living. With capital, they can grow, add employees, and contribute to a growing economy.
But if the risk of extending capital isn’t managed properly, then all is lost. The fintech fails and no more loans for solopreneurs or very small businesses.
Moove addressed this problem by investing its own credit scoring models. And they do so by using data that is available, rather than the data traditional banks demand but is rarely available, And hence, the acute shortage of working capital for micro-entrepreneurs continues.
Specifically, poor credit penetration across Africa has made it hard for Africans to purchase new cars. According to Moove, fewer than 5% of all vehicles in Africa are purchased with financing. This compared with 92% in Europe. African vehicle ownership is less than 44 cars per 1,000 people. It’s 640 per 1,000 in Europe and 816 in the United States.
Similarly in Asia and the MENA region, with a combined population of more than 5 billion people, vehicle ownership stands at just 136 per 1,000 and 261 per 1,000, respectively.
Moove solved this issue specifically for ride-hailing drivers, which it calls ‘mobility entrepreneurs’. To do this, Moove embeds its alternative credit-scoring technology onto ride-hailing and e-logistics platforms, which allows access to proprietary performance and revenue analytics of mobility entrepreneurs to underwrite loans.
Moove’s model is to provide loans to its customers by selling them new vehicles and financing up to 95 percent of the purchase within five days of sign up. Moove customers can choose to pay back their loans over 24, 36, or 48 months, using a percentage of their weekly revenue.
All Moove customers sign up to the Moove app to manage all transactions and access other financial products on the platform.
The company has a close relationship with Uber. Moove’s website features the Uber logo and makes the claim that it is “Uber’s preferred Fleet Partner in Sub-Saharan Africa.”
So what does Moove have planned for its large new pile of cash? Notably, it has eyes on the world beyond Africa. The company says the fresh cash will support expansion into seven new markets across Asia, MENA, and Europe.