Auto financing company, Moove, has raised $23 million in Series A funding round. According to the company, this funding would help democratise access to vehicle ownership for numerous Africans struggling with vehicle financing.
This latest funding brings Moove’s total investment secured to $68.2 million. This includes $28.2 million in equity and $40 million in debt.
The round was led by Speedinvest and Left Lane Capital. Other companies involved in the round include DCM, Clocktower Technology Ventures, thelatest.ventures, LocalGlobe, Tekton, FJ Labs, Palm Drive Capital, Roka Works, KAAF Investments, Class 5 Global, and Victoria van Lennep, co-founder of Lendable.
According to the company, this investment marks the first foray into Africa for many of its U.S. VC backers, thus underscoring the opportunity for a platform like Moove to address the continent’s vehicle financing gap.
Also involved in the funding round are Africa-focused VCs like Verod Kepple Africa Ventures, and one of Moove’s existing lenders, Emso Asset Management.
Moove was initially bootstrapped by its co-founders, Ladi Delano and Jide Odunsi, and later with seed-stage funding from Iyin Aboyeji’s Future Africa. The founders said they were driven by a common passion to create shared value leveraging their extensive operating experience on the continent. Moove was established to provide Africans with a path to new vehicle ownership while creating new jobs.
Moove Nigeria country manager, Chisome Anoke, said the latest funding would enable the company to expand into more states in Nigeria, increase gender equality in the industry while creating job opportunities both within Moove and for its entrepreneurial customer base.
“This round of funding will enable us to extend our footprint to more states in Nigeria and to continue serving our customers to meet the evolving needs in urban mobility. Our vision for the future also includes a commitment to reduce our carbon footprint and to increase gender equality within the industry.Chisome Anoke
Moove is looking to capitalise on the large market created by the need for vehicle financing in a continent with more than a billion people. With limited or no access to vehicle financing and the lowest per capita vehicle ownership in the world, Moove is looking to build a full-service mobility fintech that democratizes vehicle ownership across Africa.
The market opportunity is vast, with Africa being home to 1.3 billion people, with 43 per cent in urban areas and growing. In 2019 Africa had fewer than 900,000 total new vehicle sales compared to 17 million in the U.S.
Up to 95% vehicle financing loans
Vehicle ownership in Nigeria and Africa is a very tricky affair. With low purchasing power, most people rely on used cars, popularly called tokunbo for their mobility needs. But Moove is looking to grant access to new vehicles by providing up to 95% of the finance required to purchase them.
But for now, its focus is on ride-hailing and e-logistics platforms. In a nutshell, it is targeting customers who intend to use the vehicles for business. The company does this through its alternative credit-scoring technology.
Moove’s credit scoring technology when onboarded onto ride-hailing and e-logistics platforms, allows access to proprietary performance and revenue analytics of mobility entrepreneurs (Uber drivers for instance) to underwrite loans.
The auto financing company then provides loans to its customers by selling them new vehicles and financing up to 95% of the purchase within five days of signing up. 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.
Country Manager, Chisome Anoke said since the company commenced operations in Lagos in June 2020, its customers have completed over 700,000 Uber trips in Moove financed vehicles, spanning more than 10.6 million kilometres.
As Uber’s exclusive vehicle financing and vehicle supply partner in sub-Saharan Africa, Moove also claims its financed cars having completed more than 850,000 Uber trips covering over 13 million kilometres across the continent to date. The company also says it has launched in three cities and currently enjoys a 60% month-on-month growth. And this is good enough for the investors.
General Partner at Speedinvest, Stefan Klestil, expressed his confidence in the cofounders, insisting that their team and their unique approach to vehicle financing, has made Moove 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 five per cent of new cars are purchased with financing, compared to 92 per cent in Europe.”Stefan Klestil
On his part, Managing Partner at Left Lane Capital, Dan Ahrens, 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 to become a full-service mobility fintech and expand their offerings to insurance and other financial services,” he said.
Moove is a mission-led company that’s committed to giving 100 per cent of mobility entrepreneurs access to affordable credit and ensuring that 50 per cent of its customers are women. It also aims to ensure that at least 60 per cent of the vehicles it finances are electric or hybrid vehicles as part of its commitment to improving road safety and vehicle emissions on Africa’s roads.
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