13th June 2024

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Business Industry and Financial

Mubadala leads funding round for Uber partner Moove

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Mubadala Investment Company is investing in vehicle financing start-up Moove in a funding round valuing the company at $550mn, the latest in a series of deals the cash-rich Abu Dhabi investment group has made. 

The sovereign wealth fund is leading a round that sees Moove raise $76mn in equity and debt from an investor group that includes asset management giant BlackRock. 

The fund raise is a rare bright spot for a venture capital market that has tanked at a time of higher interest rates, when the appetite for fast-growing but unprofitable companies has fallen. For European firms the value of deals struck through the first half of the year plunged more than 60 per cent against the same period last year, according to PitchBook data. 

Founded in Nigeria in 2020, Moove helps drivers for companies such as Uber finance the purchase of their vehicles. 

Since inception, the company has grown rapidly across Africa and expanded into the UK, India and the United Arab Emirates. Its business model helps “unbanked” workers obtain loans that they pay back from income streams derived from the vehicle they have bought. 

“Your productivity is what we use to determine your creditworthiness,” Ladi Delano, Moove’s co-founder said in an interview with the Financial Times. “We thought at maximum we’d be solving a problem for 100 or 200 drivers in Nigeria and we’ve been amazed with the uptake in the product.” 

Delano added that a lot of the demand had been fuelled by filling a gap left by banks that misunderstand the credit profiles of certain demographic groups. 

“What it does show is that there is a gap . . . There’s an unfortunate misconception, I’d argue it’s a bias, that if you don’t fit into a credit methodology, we will assume you are a bad credit,” Delano added.

The new money will be used to help the company achieve profitability over the next 12 months, a focus for many start-ups when raising new money has become more difficult. Moove has annual recurring revenues of $90mn. 

It will also finance the company’s push into new, larger markets, as well as help it grow in existing locations in Europe, the Middle East and Africa.

“We currently operate in four cities in India and plan to expand and double down operations in India,” Delano said. “If we swing to the other part of the world, we are preparing our Latin America launch.”

Moove is also planning on rolling out financial services products targeted primarily at existing customers. The offerings will include microloans, overdrafts and insurance. These will be achieved by partnering financial institutions in the markets in which Moove operates, Delano added.