Mobility fintech startup Moove, which was started in Nigeria, is said to have let go of an unknown number of employees in all places where it does business. A person who knows about the situation says that the layoff happened in the first few days of November at the company’s offices in Nigeria.
In response to this, an official statement from Moove denies this claim, saying the layoffs are “due to issues related to performance as well as gross misconduct.”
“With regard to those employees dismissed for gross misconduct, it is important to highlight that such policy violations and gross misconduct can have serious consequences on the livelihoods of Moove customers and should not 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.
Techpoint Africa learned that the business gave affected employees three months of their base pay as severance. Moove affirms that this was solely done as a goodwill gesture.
But the affected employees had to sign non-disclosure agreements (NDAs) and waivers saying they wouldn’t sue in the future. This is part of the employment contract, which Moove says is typical of employment contracts in general.
Ladi Delano and Jide Odunsi started Moove in 2019. It helps entrepreneurs in the car-hailing, ride-hailing, and bus-hailing industries get financing for their vehicles based on how much money they make from them.
Read also: Moove secures £15 million in funding to expand operations in the UK
Moove Engagements
The business serves as Uber’s exclusive funding and supply source for vehicles in sub-Saharan Africa. It has alliances with logistics start-ups like Lori and Kobo 360 as well as automakers, including IVM, Suzuki, Tesla, Toyota, Volkswagen, and Hyundai.
Until now, Moove has undertaken various challenging tasks. Moove expanded to seven more markets six months ago, including Egypt, the UAE, Egypt, and the UK. To help its customers in the UK switch to EVs, it just released Moove Charge, an app for ride-hailing drivers that helps them connect to a network of charging stations for EVs.
The firm employs more than 400 people and operates in more than 10 markets worldwide, including six in Africa. With the most recent capital coming in the form of a €15 million loan from Emso Asset Management in October, Moove has raised over $140 million in debt financing and equity in just 2022.
It seems like Moove’s quick expansion is having an adverse effect on its financial situation. According to the source, Moove’s CEO had warned the company in an email prior to the layoffs that it was spending too much money and would have to make some serious decisions soon.
This is not true, according to the company’s official statement that the startup is still hiring in all of its international offices and that the exits do not accurately show the company’s financial health.
“Internal communications across the company have been focused on 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, and the market environment and encouraging the team to make decisions with prudence and care.
It is uncertain how many personnel were affected or how their effects are affecting the business’s operations. But it’s unlikely that the business will escape the effects of layoffs.
In developing countries, particularly in regions with a low per capita income, like Africa, the automobile financing industry can be rather difficult. Startups in this market have to deal with the risk of default, a lack of data to measure creditworthiness, problems getting and keeping customers, and competition from lenders who are not regulated. They often have to charge very high-interest rates and borrow a lot of money to stay in business.
This explains Moove’s choice to target drivers in the ride-hailing industry, a move that will largely assure repayment because it will use a portion of the weekly revenue made on the platform the drivers use. However, because the loan term associated with vehicle finance is between two and five years, scaling up operations and achieving profitability can take some time.
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About Moove
Moove is a global mobility fintech company that started in Africa. It helps entrepreneurs in ride-hailing, logistics, mass transit, and instant delivery platforms get vehicle financing and other financial services based on how much money they make.