Moove - On the move: the company setting a course for global growth and profitability

When they met in London, Ladi Delano and Jide Odunsi immediately forged a close friendship. The pair were studying in the city, Jide at the London School of Economics and Ladi at  SOAS­ , and they bonded in part over their shared experiences of growing up as the children of immigrants. Their parents were born and raised in Nigeria, but had moved to the UK before starting their families. “In a household like that, your parents have a love-hate relationship to their origin country,” Ladi explains. On the one hand, there is an unshakeable love for the place; but on the other are the negatives that had pushed them to leave. “As kids,” Ladi continues, “both Jide and I built this real sense of curiosity around how a place that could be so loved could also not work to the degree that our parents had to leave.”

This curiosity remained with them long after childhood. Indeed, it was one of the chief reasons why – having completed a Master’s, an MBa and done a variety of jobs in finance and consulting between them – they decided to join forces and become business partners. “We wanted to contribute to resolving some of the problems that existed in Nigeria for our parents,” says Ladi, speaking from his office in Dubai, where he and Jide are now based. “Our hope was that fewer people would have to leave their home country in pursuit of better opportunities.”

The pair have since set up four companies together and at the heart of each is a desire to use business to fix societal problems. They were both influenced by the work of Michael Porter from the Harvard Business School, who, along with Mark Kramer, wrote the 2011 paper “Creating Shared Value”, about how you can create economic value and societal value at the same time. Ladi recalls: “Our promise to one another then was that we would identify real societal problems and build entrepreneurial solutions to them.”

A case in point is their pharmacy business, Express Pharmacy, which caters to low-income consumers in Lagos, and which is now the fifth-largest pharmacy chain in the city. There were two problems that Ladi and Jide identified: firstly, lots of the existing pharmacies were selling counterfeit or expired drugs; and secondly, drug prices would fluctuate wildly from one day to the next. From the outset, therefore, the chain had “commitments to be the cheapest in the market, to ensure that pricing is stabilised, and to authenticate all products,” says Ladi.

However, in 2020, Ladi and Jide launched their most ambitious venture yet: the mobility fintech company Moove. Again, the business started from identifying a genuine societal challenge – in this case, a combination of unemployment, financial exclusion and a lack of economic empowerment. Moove, which is headquartered in Dubai, provides vehicle financing for what it calls “mobility entrepreneurs” (more often than not, this means Uber drivers), so that they can own a car and pay it off by working. “Our logic was that, in Africa, a vehicle is not a luxury,” says Ladi. “It’s a source of income. You can build a whole business if you have access to a car.”

There were also a number of problems surrounding vehicles that Moove set out to tackle. For instance, Nigeria has one of the highest road fatality rates in the world. This is partly because duties for importing fully assembled cars are higher than those for salvaged vehicles, so lots of second-hand cars that had been in accidents, or had failed safety and emissions tests, were shipped to Nigeria, hastily fixed up and sold cheaply. “They’re death traps,” says Ladi. “So we said, if we could get some financing into this space, not only could we ensure the safety and emissions are good, but we’ll create a living for those who would then access the vehicles.”

Most banks and lenders do not offer this kind of financing, because they feel there is too high a risk that mobility entrepreneurs will be unwilling to pay off their debt. The key that unlocked this problem for Moove was the introduction of a revenue-based financing model. Essentially, Moove negotiated with its marketplace partners, including Uber, so that it would be able to see how each vehicle is performing, how many trips it is making and how much revenue it is generating. The company also made an agreement that Moove would get paid first. “Every trip you do in a Moove car on the Uber platform, when you pay Uber, that money comes to us first, we then deduct the amount the driver owes us, and then pay the remainder to the driver,” Ladi explains. “We’re at the top of the cash waterfall.” What this does is essentially eliminate the risk of unwillingness to pay, meaning that you are purely left with the ability to pay.

This is what sets Moove apart. “Banks aren’t comfortable with the archetype of this customer anyway, and then in addition, they get even less comfortable around that willingness to pay piece,” says Ladi. “They think they’re never going to get that money back.” Moove is showing that this is not true. “Just because you’re low income, it doesn’t mean you’re bad credit,” he continues. “If you eliminate the willingness to pay risk and focus on the ability to pay, you can identify a whole new total addressable market of high credit and good credit individuals.”

Three years on from launch and Moove is growing rapidly. It has expanded across Africa, currently operates in four cities in India, and has launched in the UAE, the UK and, most recently, Thailand. In August of this year, it raised usd 76 million in equity and debt from an investor group led by Mubadala, the sovereign wealth fund of Abu Dhabi, and including the asset-management behemoth BlackRock. The funding round valued the company at usd 550 million. According to Ladi, this latest round is focused on two things: achieving profitability in the first half of 2024, and continued expansion.

Looking first at Moove’s growing footprint, Ladi explains that the company wants to grow in a number of regions and markets simultaneously over the next two years. Having launched in Thailand, expanding across Southeast Asia is a priority; similarly, India is seen as an important growth market. The company is currently only operating in one city in Europe and one in the Middle East, so there is an appetite to grow in those regions. “Finally, we’ll be launching in Latin America and North America,” he says. These ambitious plans beg the question: Can Moove’s model only work in emerging markets or could it scale beyond that? “The archetypal mobility entrepreneur in the developed world is often an immigrant,” says Ladi. “If you look at the data, when it comes to lack of access to the financial system, or access to debt, it’s a very similar customer, just with different market conditions in different markets.”

Regarding profitability, Ladi is understandably tight-lipped on the specifics, but he and Jide hope that a big part of this will be achieved through a shift towards financial services. Earlier this year, Moove built a digital wallet into its app, which is live in some markets, and currently being rolled out globally. “In partnership with traditional banks, we’re now providing banking services within that wallet – debit cards, credit cards, micro loans, overdrafts, as well as early income access,” says Ladi. “We’re now working to make that suite of financial services a big revenue driver for the business, and are expecting to see a massive uptick in that revenue line in 2024.”

However, the waters ahead are far from calm. Moove’s fund raise earlier this year was considered a rare success story in an otherwise tough venture-capital market, which has suffered due to inflation, high interest rates, renewed conflict in the Middle East and an ongoing war in Ukraine. “In the current environment, we’re seeing a lot of risks and uncertainty,” says Ladi. “Ensuring you have a business that can stand the test of time and weather the storm is the top priority. And profitability is the way we see our business getting through these turbulent waters. Our job is to make sure we stay in the boat and chart it to safe ground over the next two years.”