Moove, an African mobility fintech company that provides vehicle financing to ride-hailing and delivery app drivers, has raised $100 million in a funding round as it plans to expand into new markets.
Moove did not say who is leading the round, but sources close to the deal confirmed to TechCrunch that Uber led the Series B round, making it the company's first investment in the African continent.
The round also includes sovereign wealth fund Mubadala and several other investors, bringing Moove's post-cash valuation to $750 million. This represents an increase from the $550 million secured last August in an equity and debt round led by Mubadala. The news confirms a Bloomberg report released last month. Dubai-based companies The Last Ventures, AfricaInvest, Palm Drive Capital, Triatlum Advisors, and Future Africa also participated in the financing round.
The company has raised $250 million in equity (and $210 million in debt) to date.
Financing is crucial for Moove as it prepares to enter new markets. The company operates in 13 cities in six markets, including Nigeria, South Africa, Ghana, the United Kingdom, India and the United Arab Emirates. Moove says it plans to use the new capital to expand its revenue-based vehicle financing platform to 16 markets by the end of 2025.
Moove takes a two-pronged approach to vehicle financing. The four-year-old mobility fintech company buys fleets of vehicles, which it then sells to drivers through the platform. Its software provides financing to drivers through a credit scoring system, enabling drivers to purchase new vehicles for passenger transportation, logistics and delivery services. The vehicles offered to Moove customers vary from traditional options like Toyotas and Suzukis to electric vehicles (EVs) like Teslas.
A percentage of drivers' weekly income is deducted and transferred to car payments.
Why did Uber fund Moove?
Uber is Moove's largest auto financing and vehicle supply partner. The company also has partnerships with other gig networks, including SWVL and Kobo, according to its website.
Uber's investment in Moove, its first in an Africa-based startup, signals a concerted effort to ensure a steady supply of drivers for its ride-hailing platform. Delano views the investment as a validation of Moove's business model and emphasizes its role in strengthening the strategic relationship between the two parties.
Uber's investment in Moove and other fleet management startups, such as India's Everest Fleet, is in line with the company's commitment to a zero-emission fleet by 2040. Electric vehicles, in turn, have become a big part of Moove's business strategy since expanding outside of Africa. In 2021. The vehicle financing startup operates large fleets of electric vehicles in the UAE and the UK. It is currently testing a production line in India, with plans to offer more than 20,000 electric vehicles on Uber.
Much of its expansion into new markets will focus on electric vehicles, “which will lay the foundation for a more sustainable and accessible mobility ecosystem for its customers around the world,” Moove said in a statement. However, customers in Africa may experience delays in engagement.
Moove was initially optimistic about expanding its electric vehicle product line in Africa. In a 2021 interview, co-CEO Ladi Delano explained a strategy: Moove would buy new electric vehicles at a discount and sell them at lower prices in the region. Potential challenges, such as poor road conditions and a lack of charging infrastructure needed to expand across Africa, could have undermined Moove's initial plan. Therefore, the startup is considering an alternative approach: natural gas vehicles.
“We want to be at the forefront of the electric vehicle sector in the UK and UAE by putting more electric vehicles on the road. But in countries like Nigeria, we hope to be at the forefront of the shift from internal combustion engines to CNG vehicles and then from natural gas CNG to electric vehicles. “We are doing a lot of work right now to prepare the Nigerian market for the transition to CNG, with the hope that this will reduce the impact of rising fuel prices on our customers’ bottom line.”
Driver challenges
Over the past year, Moove drivers in Nigeria have faced various challenges, including a spike in fuel prices amid inflation of more than 30%. Exchange rate fluctuations have also affected the cost of vehicle repair in a country that relies heavily on imports. Although drivers joined Moove to find a source of income, these macroeconomic conditions have placed significant pressure on them, leading some to protest that their working arrangements with the vehicle finance platform (particularly in relation to weekly transfers to the platform) add further pressure. Of comfort.
Delano explained that Moove's tried to design its products to meet these challenges while maintaining profitability. He highlighted several initiatives, such as Moove Care programs, that were implemented over the past year to support drivers. These initiatives include reducing weekly transfers by 33%, introducing fuel subsidy plans during price increases, and introducing flexible payment options. For example, customers now have the flexibility to extend the repayment term from 48 months to 50 to 60 months, ensuring the total cost remains affordable on a week-by-week basis.
Nigeria, in addition to being an unprofitable market, is no longer Moove's biggest market thanks to customers as Delano revealed during the call. When asked about the possibility of Moove exiting Nigeria due to ongoing macroeconomic challenges affecting its profitability, Delano said such a move was unlikely. He attributed this position to the mission behind founding the company with co-founder Jide Odunsi: to provide access to vehicle financing and generate employment and income opportunities for drivers in the country and across Africa.
“When we started, Nigeria had positive unit economics, but due to many macroeconomic factors, the positive unit economics have clearly changed,” the CEO said. “But we can see and believe in a clear roadmap for a return to positive unit economics in this market in the not too distant future, despite the support we provide to our customers and the shocks we experience daily.”
Moove's growth strategy
Moove has used diversification – by geography and market categories – to fuel its expansion while reducing risk. Not only is Moove present in a variety of countries, but the company also markets ride-hailing, logistics, mass transit, and instant delivery platforms. And it seems to be moving towards Uber's competitors as well.
TechCrunch has gathered from multiple sources that Moove recently signed a deal with Bolt, Uber's main competitor in emerging markets, to expand options in ride-hailing services, the most important category. The details of this partnership and its implementation are still unclear, especially in light of the current arrangement between Moove and Uber.
Delano declined to comment, but said Moove has secured several partnerships with several global markets to provide customers with more choices. He added that activating these partnerships requires time.
This latest funding comes after a year of significant growth for Moove, which is also backed by New York-based Left Lane Capital and European VC Speedinvest. Last August, the mobility fintech company had 15,000 customers who completed more than 22 million trips. It now facilitates more than 30 million trips for more than 20,000 customers across its six markets.
Moove's annual recurring revenue also increased from $90 million to $115 million during this period; The company says it is on its way to achieving profitability during the next fiscal year.
Following this deal, Moove, based on its partnership with Mubadala, moved its headquarters to the United Arab Emirates. The UAE is important to Moove, as it introduced its fully integrated charging solution there and recorded the highest number of electric vehicle trips on the Uber platform in 2023. Delano revealed plans to ramp up investments in the UAE and other markets across Africa, Europe and Asia. With expansion into Southeast Asia and Latin America in the coming months.
“We believe in the potential of the African market and our business within it, so we will continue to invest accordingly,” he said. “However, it is critical that these investments are profitable. Additionally, we will continue to evaluate opportunities globally and expand into markets where we see a clear path to profitability or positive unit economics.”
