Africa is home to over a billion people, the majority of whom have little or no access to auto finance. In fact, the continent has the lowest per capita car ownership rate in the world. In 2019, Africa had less than 900,000 new vehicle sales. The United States sold more than 17 million new cars in the same year.
In Nigeria, owning a car is a luxury few can afford. This is a similar case across Africa where car owners often recycle used cars among themselves due to the difficulty of accessing news. Moove, an African mobility company with a fintech game, wants to change that, and raises $ 23 million in Series A at scale quickly across the continent.
To move was founded by Ladi Delano and Jide Odunsi in 2019. In an interview with TechCrunch, Delano said that he and Odunsi, while trying to figure out the issues that need to be addressed in Nigeria after years of running successful businesses, were left surprised by the numbers highlighted above: less than a million new cars sold across an entire continent and over 17 million in the United States alone.
âIt has become clear to us that people do not buy cars in Africa because there is no access to finance. When you look elsewhere in the world, you get financing in most parts of the developed world when you try to buy a car.. It’s like that in the UK, or in Europe and the US. And that’s what drives mobility and vehicle sales, âDelano said during the interview..
The founders saw it as a huge task to fill this gap and believed that deploying an asset finance model was the ideal approach. Moove says he’s democratizing vehicle ownership using a revenue-based vehicle financing model. yetThis only applies to a subset of the driver population across the continent Moove calls mobility entrepreneurs.
These include drivers who work in the mobility space (car-car, race-car, bus-call, among others). Although they represent only a small portion of Africans who need Moove’s services, Delano says the market for âmobility entrepreneursâ is huge.
What is the rationale behind supporting carpooling drivers instead of the entire population? Delano told TechCrunch that as Moove changes the way people access new cars in Africa, he wants the company to address some of the unemployment issues facing the continent, even more so in Nigeria.
So instead of providing the service to individuals from all walks of life who cannot guarantee reimbursement, why not target drivers who would take the opportunity to work and, in turn, generate income to reimburse .
Moove is Uber’s exclusive auto finance and vehicle supply partner in sub-Saharan Africa. The company integrates its alternative credit scoring technology, providing access to proprietary analyzes of performance and income for underwriting loans. It grants loans to these drivers by selling them new vehicles and financing up to 95% of the purchase within five days of registration. They can choose to pay off their loans over 24, 36, or 48 months, using a percentage of the weekly income generated while driving on Uber..
Moove’s loan repayment process is more driver friendly than what traditionally exists on the market. Nigerian banks, for example, are known collect a deposit of 10 to 50% from the drivers; Moove says he charges 5%. The net effective annual interest rate also differs significantly. Nigerian banks charge between 20 and 25%; yet, Moove operates at a rate of 8-13%.
Moreover, when considering the duration of an auto finance loan, Nigerian banks rarely give a repayment term of more than two years.. Moov’s maximum the duration is four years. In the long run, Delano says the company wants to extend the repayment term to five years, a period with more parity in the West..
That said, Moove is looking to add funding to other classes and types of vehicles in the coming months, including buses and trucks..
Although Moov Was found in 2019, he did not fully launch until June 2020. In a full year of operation, Moove has aggressively. With its head office in the Netherlands, the company counts Lagos, Accra, Johannesburg as the cities in which it operates. Moove has 12,900 pre-approved registrations and its The funded cars also made more than 850,000 Uber trips. Delano says business grew 60% month-over-month since last year.
Moove raised a funding round of $ 5.5 million last year. The majority of the funding came from the founders and Iyinoluwa Aboyeji, co-founder of Andela and Flutterwave, and a key partner of the company. in addition to his $ 23 million Series A, Moove also revealed that he raised $ 40 million in debt financing, bringing his total funding to $ 68.5 million.
Speedinvest and Left Lane Capital led the round of Series A. Other investors like 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 one of Moove’s existing lenders, Emso Asset Management, also joined the round. Moove’s investment is the first for many of its US backers in this cycle.
âWith Ladi and Jide leading a world-class team and their unique approach to vehicle finance, Moove has fast has established itself as one of Africa’s most exciting technology companies, âsaid Stefan Klestil, Managing Partner of Speedinvest. âThe company’s expansion to three cities in less than 12 months demonstrates the huge demand for vehicle finance in Africa, where correct five percent of new cars are bought with financing, compared to 92% in Europe.
Delano and Odunsi are Nigerians of British descent, graduates of the London School of Economics, the University of Oxford and MIT. Delano has always been an entrepreneur. Odunsi, meanwhile, was an investment banker at Goldman Sachs and a management consultant at McKinsey.
The two reconnected years later (since their teens) to run a corporate studio called Grace Lake Partners and have subsequently built three successful non-tech companies in Africa over the past decade. Moove is their first tech company, and Delano calls it the fastest growing he has ever led.
The Series A funding will allow Moove to expand and expand into new markets. It gives the company the means to develop and launch new products and services adapted to gain more share in a competitive market where the Nigerian Autochek and the South African FlexClub are making significant progress.
Delano believes what gives Moove an edge over other companies is its hallmark of getting drivers to access new cars rather than used cars. He also adds that the company is moving towards the creation of fleets of electric and hybrid vehicles.. He cites helping mobility entrepreneurs who need fuel efficient cars and climate change as reasons for creating this new product line.
But how will electric vehicles be affordable for the average Uber driver in Africa? Delano argues that with Moove’s strong bargaining power with its OEM partners and leveraged debt financing, Moove can buy new electric cars and resell them for less than thousands of drivers. The goal is to ensure that at least 60% of the vehicles it finances will be electric or hybrid in the years to come. The company is also trying to promote the inclusion of women by increasing the number of female drivers using its platform to 50%..
An interesting element in Moove’s impending plans is the creation of wallets for drivers who do not have a bank account for make and accept payments. The feature film is only shown in Ghana, but will arrive in other markets shortly.
âMoove’s technology is fundamentally changing access to mobility and enabling thousands of people to earn a new source of income, âsaid Dan Ahrens, Managing Partner of Left Lane Capital. âAs we look to the future, the potential for this technology and the Moove team to grow 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. “