Moove Raises $23M to Empower African Drivers with Car Ownership

Vehicle Financing Challenges in Africa

Africa, a continent with a population exceeding one billion, faces a significant hurdle: limited access to vehicle financing for a large portion of its citizens. Indeed, the continent exhibits the lowest rate of per capita vehicle ownership globally. In 2019, the total number of new vehicle sales across Africa was less than 900,000, a stark contrast to the over 17 million new cars sold in the United States during the same period.

The Luxury of Car Ownership in Nigeria and Beyond

In Nigeria, car ownership remains a privilege attainable by only a small percentage of the population. This situation is mirrored throughout much of Africa, where individuals frequently rely on recirculating used vehicles due to the difficulties in securing financing for new ones. Moove, an African mobility firm integrating fintech solutions, is striving to alter this landscape and is currently securing $23 million in Series A funding to facilitate rapid expansion across the continent.

Moove's Founding and the Identification of a Key Problem

Moove was established in 2019 by Ladi Delano and Jide Odunsi. Delano explained in an interview that, after years of successfully operating other businesses in Nigeria, they were struck by the disparity in vehicle sales figures – fewer than a million new cars sold continent-wide versus over 17 million in the U.S.

The Core Issue: Lack of Financial Access

“It became apparent that the primary reason people aren’t purchasing cars in Africa is the absence of accessible financing options,” Delano stated. “In most developed nations, financing is readily available when buying a car, whether in the U.K., Europe, or the United States. This access is a key driver of mobility and vehicle sales.”

A Revenue-Based Financing Model for Mobility Entrepreneurs

Recognizing the substantial nature of this challenge, the founders determined that an asset financing model was the most effective approach. Moove is working to democratize vehicle ownership through a revenue-based financing system. However, this model is currently focused on a specific segment of the driving population: those Moove identifies as “mobility entrepreneurs.”

Targeting the Mobility Sector

These entrepreneurs include drivers engaged in various mobility services, such as car-hailing, ride-hailing, and bus-hailing. While representing a smaller portion of those who could benefit from Moove’s services, Delano emphasizes the immense size of this particular market.

Addressing Unemployment Through Mobility

Delano explained to TechCrunch that, while Moove aims to improve access to new cars in Africa, a core objective is to contribute to solving the continent’s unemployment issues, particularly in Nigeria. Instead of offering services to individuals without guaranteed repayment, Moove targets drivers who can generate income through their work and use that income to repay their loans.

Moove as Uber’s Preferred Financing Partner

Moove has been designated as Uber’s preferred car financing and vehicle supply partner throughout sub-Saharan Africa. The company utilizes its proprietary credit-scoring technology, incorporating performance and revenue analytics to assess loan applications. It offers loans to drivers, facilitating the purchase of new vehicles with financing covering up to 95% of the cost, available within five days of application.

Flexible Repayment Options

Drivers can choose repayment terms of 24, 36, or 48 months, utilizing a portion of their weekly earnings from driving on the Uber platform.

Competitive Advantages in Loan Terms

Moove’s loan repayment structure is more favorable to drivers compared to traditional options. For example, Nigerian banks typically require a 10-50% deposit, while Moove requires only 5%. The effective annual interest rate also differs considerably; Nigerian banks charge 20-25%, whereas Moove operates within an 8-13% range.

Extended Loan Tenures

Furthermore, Nigerian banks rarely offer repayment periods exceeding two years. Moove provides a maximum duration of four years, with plans to extend this to five years, aligning more closely with standards in Western markets.

Expanding Vehicle Class Financing

Looking ahead, Moove intends to broaden its financing options to include other vehicle types, such as buses and trucks.

Rapid Growth and Operational Footprint

Although founded in 2019, Moove officially launched in June 2020. Within a year of full operation, the company has experienced substantial growth. Headquartered in the Netherlands, Moove currently operates in Lagos, Accra, and Johannesburg. It boasts 12,900 pre-approved applicants and its financed vehicles have completed over 850,000 Uber trips. Delano reports a 60% month-over-month growth rate since last year.

Funding and Investment Details

Moove secured a $5.5 million seed round last year, primarily funded by the founders and Iyinoluwa Aboyeji, co-founder of Andela and Flutterwave, and a key partner within the company. In addition to the $23 million Series A round, Moove also secured $40 million in debt financing, bringing its total funding to $68.5 million.

Series A Investors

Speedinvest and Left Lane Capital spearheaded the Series A round. Additional investors included DCM, Clocktower Technology Ventures, thelatest.ventures, LocalGlobe, Tekton, FJ Labs, Palm Drive Capital, Roka Works, KAAF Investments, Class 5 Global, Victoria van Lennep (co-founder of Lendable), Verod, Kepple Africa Ventures, and Emso Asset Management, one of Moove’s existing lenders. This round marks the first African investment for many of the U.S.-based backers.

Investor Confidence and Market Potential

“With Ladi and Jide leading a world-class team and their innovative approach to vehicle financing, Moove has rapidly become a standout tech company in Africa,” stated Stefan Klestil, general partner at Speedinvest. “The company’s expansion to three cities in under 12 months demonstrates the significant demand for vehicle financing in Africa, where only 5% of new cars are purchased with financing, compared to 92% in Europe.”

The Founders’ Backgrounds

Delano and Odunsi are both British-born Nigerians with educational backgrounds from prestigious institutions: the London School of Economics, Oxford University, and MIT. Delano has a consistent history as an entrepreneur, while Odunsi previously worked as an investment banker at Goldman Sachs and a management consultant at McKinsey.

A Track Record of Success

The two reconnected after years apart to establish Grace Lake Partners, a venture studio, and have collectively built three successful non-tech businesses in Africa over the past decade. Moove represents their first venture into the technology sector, and Delano describes it as the fastest-growing company he has ever led.

Future Growth and Competitive Landscape

The Series A funding will enable Moove to expand its operations into new markets and develop new products and services, aiming to increase its market share in a competitive environment alongside companies like Nigeria’s Autochek and South Africa’s FlexClub.

Moove’s Competitive Edge: New Vehicles and Electric Fleets

Delano believes Moove’s focus on providing access to new vehicles, rather than used ones, is a key differentiator. He also highlighted the company’s move towards creating electric and hybrid vehicle fleets, driven by the need for fuel-efficient options and concerns about climate change.

Affordability of Electric Vehicles

Addressing the question of affordability for Uber drivers, Delano explained that Moove’s strong relationships with original equipment manufacturers (OEMs) and its debt financing capabilities allow it to purchase new EVs at competitive prices and offer them to drivers at a reduced cost. The goal is to ensure that at least 60% of the vehicles financed by Moove are electric or hybrid in the coming years.

Promoting Gender Inclusion

The company is also committed to promoting gender inclusion, aiming to increase the proportion of female drivers on its platform to 50%.

Expanding Financial Services for Drivers

Moove is planning to introduce digital wallets for drivers who lack bank accounts, enabling them to make and receive payments. This feature is currently available in Ghana and will soon be rolled out to other markets.

Investor Perspective on Moove’s Potential

“Moove’s technology is fundamentally transforming access to mobility and empowering thousands to earn a new income source,” said Dan Ahrens, managing partner at Left Lane Capital. “The potential for that technology and the Moove team to expand even further is incredibly exciting. They have the opportunity to become a full-service mobility fintech and broaden their offerings to include insurance and other financial services.”