After raising $140m+ from 4 funding rounds in 2022, mobility startup, Moove quietly "dismisses" employees

December 6, 2022
3 min read

Editor's note: {Tuesday, December 6, 2022. 10 PM (WAT)} The article has been updated to reflect Moove's employee strength(the startup insists it has a workforce of 400, not 700 as initially reported); a comment on deposit fee (as opposed to what is available in this TechCrunch feature, Moove indicates it doesn't charge a deposit fee of 5%); and argued that these aren't layoffs but dismissals.

Nigerian-founded mobility fintech startup, Moove has reportedly laid off an undisclosed number of its workforce spanning all the markets it currently operates. According to a source close to the matter, the dismissal was carried out in its Nigeria offices in early November without prior notice. 

In response to this, an official statement from Moove refutes this claim, stating that these are not layoffs but dismissals of a group of employees "due to issues related to performance as well as gross misconduct."

"With regards to those employees dismissed on the grounds of gross misconduct, it is important to highlight that such breaches of policies and gross misconduct can have serious consequences on the livelihoods of Moove customers, and is something that cannot be taken lightly. As such, we enforce a zero-tolerance approach to gross misconduct and remain firmly committed to adhering to this policy across all business areas," the statement reads.

Regarding severance, Techpoint Africa gathered that the startup paid three months of base salary to affected employees. Moove confirms this was only done as a gesture of goodwill.

However, affected employees were required to sign non-disclosure agreements (NDAs) and waivers preventing them from taking legal action in the future. According to Moove, this forms part of its contractual employment agreement, which it considers as standard in employment contracts.

Moove, founded by Ladi Delano and Jide Odunsi in 2019, offers revenue-based vehicle financing to mobility entrepreneurs globally, especially those in the car-hailing, ride-hailing and bus-hailing space. 

The company is Uber's exclusive vehicle financing and vehicle supply partner in sub-Saharan Africa (SSA) and has partnerships with automobile brands, including IVM, Suzuki, Tesla, Toyota, Volkswagen, and Hyundai, and logistics startups like Lori and Kobo 360.

So far, Moove has taken on some ambitious projects. Six months ago, Moove expanded to seven new markets, including India, UK, UAE, and Egypt. Recently, it launched Moove Charge, an end-to-end electric vehicle (EV) charging network app specifically for ride-hailing drivers, as it helps its customers in the UK transition to using EVs.

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The startup operates in over 10 markets globally, including six in Africa, and has a workforce of more than 400 employees. Moove has raised over $140 million in debt financing and equity in 2022 alone, with the most recent funding coming in the form of a €15 million debt financing from Emso Asset Management in October.

It appears that Moove’s rapid growth may be taking a toll on its finances. The source said that Moove's CEO had mentioned in an email before the layoffs that the company was burning through a lot of money and would need to take drastic steps in the coming weeks.

Disagreeing with this, the official statement claims that the exits do not reflect the business's financial health, and the startup is still hiring across its global offices.

"Internal communications across the company have been around sharing the company's vision and encouraging employees to think like owners regarding spending and cost management. This includes the CEOs explaining the business' growth stage, the market environment, and encouraging the team to make decisions with prudence and care."

It is unclear how many employees were affected by this or how they are impacting the company's operations. However, it is unlikely that the company is immune from the outcomes of laying off.

The vehicle financing business is quite challenging in developing markets, especially in locations with relatively low per-capita income, like Africa. Startups playing in this space have to face risks of defaults, insufficient data to determine creditworthiness, difficulty in attracting and retaining customers, and competition from informal lenders. To stay afloat, they often have to raise huge capital and institute high-interest rates.

This explains Moove’s decision to target drivers in the ride-hailing space, which to a large extent, will guarantee payback by using a percentage of the weekly revenue generated on the platform the drivers use. However, considering the loan tenure associated with vehicle financing – between two and five years – scaling operations and attaining profitability might take a long time.

According to this TechCrunch feature, Moove collects a 5% deposit fee and offers annual interest rates ranging between 8%-13%. Contrarily, the startup says it does not charge a deposit or require a credit check.

Read more about the global layoff trend here.

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Human enthusiast | Writer | Senior reporter | Podcaster. Find me on Twitter @Nifemeah.
Human enthusiast | Writer | Senior reporter | Podcaster. Find me on Twitter @Nifemeah.
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Human enthusiast | Writer | Senior reporter | Podcaster. Find me on Twitter @Nifemeah.

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