Moove, an auto financing start-up for ride-hailing drivers, is eyeing up expansion around Africa.
Launched in June of last year and with a $23 million Series A round in its back pocket, the Nigerian start-up provides auto financing for ride-hailing drivers in markets where such financing options are thin on the ground.
Chief executive Ladi Delano said that cars are the primary way for many to get around in the African countries that it operates but car ownership is still much lower than in the US and Europe.
“Why do we not have enough cars even though it’s our primary source of transportation?” he said. “The real reason is that there’s no financing, there’s no access to financing for individuals, companies, small businesses to purchase the vehicles that they need to move from A to B so where we come in is actually to provide that financing to Africans at their point of need.”
The company has zeroed in on ride-hailing app drivers as its key clients through a partnership with Uber in Nigeria, Ghana, South Africa and Kenya. Unlike traditional car loans, an Uber driver’s repayments are linked to their volume of work and revenue generation.
“In this instance, a ride-hailing vehicle, we can use the data of your productivity to actually assess that loan,” Delano explained.
“That gives customers a lot of flexibility relative to banks whereby in the instance of Covid where there’s no productivity, your monthly payment would still have been due. Whereas in our case, there’s no productivity so it’s much easier for us to restructure the facility so that when drivers do get back on the road, they can literally get back into the same car and start generating income.”
The model does present some risks for Moove, especially in the case of longer lockdowns, where borrowers may be out of work for an extended period of time and no repayments are made.
Delano said that its interest rates of 10% to 13% are typically lower than traditional loans seen elsewhere and can be spread out as far as 60 months.
According to Delano, 1.4 million trips have been made in Moove-financed vehicles since it launched operations last year. He added that around 60% of cars financed through Moove are electric or hybrid models.
The start-up recently inked its latest partnerships with Kenyan logistics tech firm Lori to provide financing for truck drivers.
“There's not a lot of trucks to move goods around for the continent. Less than 1% of trucks on the continent are purchased through financing so one of the things that we're trying to work with Lori is to increase the quality of trucks that are going on the roads.”
He added that getting more trucks on the road can make internal logistics in countries like Nigeria more effective, rather than relying on importing goods, which will in turn drive greater investments in road infrastructure.
Moove raised $23 million in a Series A round in August led by Left Lane Capital and Speedinvest.
“There is a world, and it's definitely a vision for us, that we can go global. [Lack of financing] is a problem that exists in other emerging markets,” Delano said.
“As we build the muscle on the continent, learning our product, learning our customers, learning our operations, maybe there is a world where we can transfer that to other markets globally but at the moment we're heavily focused on Africa.”
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