THUR 12 AUG, 2021-theGBJournal- Moove Africa is an embedded vehicle financing marketplace that has raised $23mn in a Series A round (led by Speedinvest and Left Lane Capital) and $40mn in debt.
It has an exclusive partnership with Uber for strategic vehicle supply in its ride share categories across SSA. Headquartered in the Netherlands, it’s operational in Nigeria, Ghana and South Africa. Moove is tapping into Africa’s growing urbanisation and shared economy trends. It uses alternative data to provide easier financing access to new vehicles, while exploring different scale paths.
Business model
Moove’s platform connects with three core players – drivers (looking to secure new or fairly used vehicles on one of its plans), vehicle suppliers (providing vehicles at discounted prices in bulk), and service providers (financial services, technical services etc). What: Moove provides vehicle financing to Uber drivers, leveraging its exclusive partnership with Uber for vehicle financing and vehicle supply in sub-Saharan Africa.
The business model is tapping into urbanisation trends in Africa, even as companies such as Uber lead the way in growing the continent’s shared economy. Moove has different potential scale paths – regionally, service offerings, mobility type, and beyond Uber, while exploring other datadriven monetisation paths. How: Moove sources debt to finance its cars. To source drivers, it currently relies on Uber driver data – ratings, driving history, cashflow etc. Qualifying drivers get invited to a 1.5hr walk-in registration process which includes a simulated test and could get approved for a car, depending on selected plan, within five days. Driver-to-vehicle ratio is very high (i.e. >1).
The leased vehicle comes with fuel discounts, insurance, a free phone and data, free servicing and maintenance, partnerships with healthcare companies, in-car advertising etc. Vehicles are monitored via telematics, to track and gather car health and driving data. Depending on the market, passengers typically pay the driver via cash (Nigeria), mobile money (Ghana) or cards (SA), after which the driver settles Moove daily or weekly. Cards provide the least collection risk.
Revenue model
Moove can finance up to 95% of the purchase within five days of sign-up to its offerings, including flexible rental (1-4 weeks) and drive-to-own lease (24-, 36- and 48-month options). Leases are most popular as drivers are enticed by the prospect of owning a new car (the new-to-used car ratio in Nigeria is 1:131 [according to the UN, 2017]).
Moove charges a net effective annual interest rate of 8-13% vs banks’ 20-25% and earns income from in-car adverts. Unit economics, which it says are profitable, are optimised via bulk discounts on its car purchases and other services provided to drivers.
Future plans
Moove has 12.9k pre-approved sign-ups and its financed cars have completed over 850k Uber trips to date. It is looking to expand financing to other vehicle types in the coming months, including buses and trucks. It also wants to extend its repayment duration to five years, a span with more parity to the west. It also intends to expand its wallet offering to drivers who don’t have bank accounts i.e. taking its learnings from Ghana to other African markets.
Transaction Commentary
Ladi Delano, Co-Founder of Moove: ‘’Fewer than 1 million new cars sold In Africa and more than 17 million in the U.S alone, So it became clear to us that people aren’t buying cars in Africa because there is no access to finance, This funding contributes to our ability for us to provide revenue-based financing as Moove empowers Africa to safely become mobility entrepreneurs. We help people buy new cars who otherwise couldn’t afford them. And then, using the vehicle as mobility entrepreneurs, they are able to earn money, which allows them to pay off the vehicle over time.’’
Dan Ahrens, Managing Partner, at LEFTLANE said; ‘’Moove’s technology is fundamentally changing access to mobility and empowering thousands to earn a new source of income. As we look ahead, the potential for that technology and the Moove team to expand even further is very exciting. They have the opportunity a full service mobility fintech and expand their offerings to insurance and other financial services.’’
Stefan Klestil, General Partner, Fintech at Speedinvest said; with Ladi and Jide Odunsi at the hekm of a world-class team, and their unique approach to vehicle finacing, Moove has quickly established itself as one of the most exciting tech companies in Africa. The company’s expansion to three cities in under 12 months demonstrates the huge demand for vehicle financing in Africa, where just 5% of new cars are purchased with financing compared to 95% in Europe.’’
Adesoji Solanke is Director, Research (London), Banks / Fintech – Frontier / Sub-Saharan Africa at Renaissance Capital
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