Mobius Motors Kenya delivered a car it believed could traverse the country’s variable road terrain with comfort and versatility. But, after 13 years, the automaker’s ride in Kenya has hit the end of the road as funding dried up.
“Our shareholders have not provided new capital,” said Michael de Souza, commercial director at Mobius.
“We have been seeking new investors but have not been successful. It’s a sad day,” he said yesterday when the company announced it was going into voluntary liquidation.
Mr De Souza added that the funding gap had led to a shortage of the cars, hurting sales.
Founded in 2011 by British entrepreneur Joel Jackson, Mobius in 2015 awed Kenya and Africa with Mobius I —a rugged, low-priced sports utility vehicle (SUV) designed for the continent’s roads.
The dream was to step up production and expand to East Africa, starting with Uganda and Tanzania. However, this dream is all but gone after shareholders announced through a Tuesday morning notice that they have resolved to liquidate the company.
“At a meeting of the shareholders held on 5-Aug-2024, it was resolved to place the company under liquidation as per section 393(1) (b) of the Insolvency Act and to appoint KVSK Sastry as the liquidator to wind-up the company,” said Nicolas Guibert, chief executive at Mobius, in a notice.
Many struggling firms in Kenya have opted for administration, only going for liquidation when attempts to rescue their operations fail.
However, Mobius has decided to liquidate straight away, in what will bring to an end its 13-year operation in Kenya.
Mobius exits the stage with a proud dream that convinced Mr Jackson to quit his job in rural Kenya and venture into the automotive space.
He had travelled to Kenya in 2009 and spent years crafting business strategy and operations at a micro-forestry social enterprise, before stumbling on what he believed was a good business idea.
Mr Jackson wanted a car for African roads and Mobius gave him the room to fulfil this ambition. The bold idea attracted about $56 million (Sh7.25 billion) in funding over five rounds, locking in several key investors including Playfair Capital, Chandaria Industries and DFC, a US government development corporation.
The founder tapped Mr Guibert who previously worked as Jaguar Land Rover plant operations director and global manufacturing transformation director, to the CEO role. He also brought in John Kavila from the UK’s Caterpillar to become Mobius’ technical director.
With the money and the right people, Mobius announced its presence to the market with Mobius I in 2011 as the first vehicle to be built by local welders and mechanics.
It would soon follow up with Mobius II in 2015, pushing to leave a mark in a market saturated with cheaper, second-hand imports from Asian countries. This was thanks to an initial partnership with Kenya Vehicle Manufacturers (KVM), which received the designs and technical assistance from Mobius.
However, Mobius was driving to one of its first roadblocks and it had everything to do with taxes.
The Kenya Revenue Authority (KRA) in 2018 hit Mobius with a tax claim of Sh85.74 million based on assessments covering the period of January 2014 to December 2016 relating to capital received from shareholders. Mobius appealed the demand at the Tax Appeals tribunal but lost the case.
The firm had demonstrated its financial vulnerability by producing its financial statements and warned that paying such an amount would lead to its collapse. The firm’s financial records showed it had a liability of Sh649.2 million as at end of August 2020 and a shareholder deficit of Sh389.1 million. Yet, KRA, with its offices just metres away from Mobius, had moved with speed to get its claim of taxes.
Still, from its offices at Sameer Business Park, Mombasa Road, Nairobi, Mobius dreamt on. Mr Jackson and his team hit the market with Mobius III in 2021, making a bold statement given that Covid-19 pandemic had battered economies and forced many firms to put on hold their investment plans.
Mobius III was being sold for $43,000 (Sh5.5 million), promising to give imported SUVs a run for their money.
The price was more than three times that of Mobius II —a testament to the improved features compared to its predecessor models.
Then came the Tuesday surprise announcement. The company will meet its creditors on Thursday next week to vote on whether to accept KVSK Sastry as the liquidator.
