Most vehicle loans from Nigerian banks have a shelf life of 24 months and come with so many stringent measures that customers end up discouraged from even trying.
In 2020, Vice President Yemi Osinbajo said the demand for vehicles in Nigeria currently stood at about 720,000 against actual local production by the available assembly plants at about 14,000 capacity. Although vehicle importation dominates the Nigerian automotive industry, demand is still largely unmet due to low-income levels and an economy still struggling to get rid of recession and back on the path of growth. This is mainly why most financial institutions do not prioritise loans for vehicles even with the demand for vehicles rising.
Moove, a Lagos-based mobility fintech company, has been fixated on tackling vehicle financing and helping more people in Africa to afford their dream vehicles, since it commenced operations in June 2020. The company has now announced that it raised $23 million in Series A funding to build a full-service mobility fintech that democratises vehicle ownership across Africa.
The funding round is led by first-time foreign investors such as Speedinvest and Left Lane Capital with participation from DCM, Clocktower Technology Ventures, thelatest.ventures, LocalGlobe, Tekton, FJ Labs, Palm Drive Capital, Kora Capital, KAAF Investments, Class 5 Global, and Victoria van Lennep, co-founder of Lendable.
The funding also brings the total investors’ funds in Moove to an incredible $68.2 million distributed across equity ($28.2m) and debt ($40m). The funding is remarkable not only because Moove was barely founded one year ago, but it is also an indication that investors are eager to take advantage of the opportunities in the automotive industry on the continent and are looking for companies that have the vision and the commitment to solve the problems in the industry.
“Moove’s technology is fundamentally changing access to mobility and empowering thousands to earn a new source of income,” said Dan Ahrens, Managing Partner at Left Lane Capital. “As we look ahead, the potential for that technology and the Moove team to expand even further is very exciting. They have the opportunity to become a full-service mobility fintech and expand their offerings to insurance and other financial services.”
Moove was founded by Ladi Delano and Jide Odunsi who are British-born Nigerians, educated at the London School of Economics, Oxford University, and MIT. The founders have successfully built three other businesses in Africa over the last eight years through their venture studio, Grace Lake Partners.
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.
Moove sees a vast market opportunity in Africa which is home to 1.3 billion people, with 43 percent in urban areas and growing, and in 2019 had fewer than 900,000 total new vehicle sales compared to 17 million in the U.S.
“Since commencing operations in Lagos in June 2020, our customers have completed over 700,000 Uber trips in Moove financed vehicles, spanning more than 10.6 million kilometres” said Chisome Anoke, Nigeria country manager for Moove.
Moove is Uber’s exclusive vehicle financing and vehicle supply partner in sub-Saharan Africa, with Moove-financed cars having completed more than 850,000 Uber trips covering over 13 million kilometers across the continent to date.
The company plans to extend its footprint to more states in Nigeria. It also has ambitions to reduce its carbon footprint and to increase gender equality in the automotive industry.
“In doing so, we will be able to create more job opportunities, both within Moove and for our entrepreneurial customer base,” Anoke said.
The start-up was initially bootstrapped by its co-founders with seed-stage funding from Future Africa, an Africa-focused fund led by Iyin Aboyeji, who was a founder at Andela and Flutterwave. The new Series A funding will allow Moove to grow and expand into new markets as well as develop and launch new products and services. The equity raise follows a year of momentum and success for Moove with the launch of three cities and 60 percent month-on-month growth so far.
“With Ladi and Jide at the helm of a world-class team, and their unique approach to vehicle financing, Moove has quickly established itself as one of the most exciting tech companies in Africa,” said Stefan Klestil, General Partner at Speedinvest. “The company’s expansion to three cities in under 12 months demonstrates the huge demand for vehicle financing in Africa, where just five percent of new cars are purchased with financing, compared to 92 percent in Europe.”