Mobius Motors, the Kenya-based automaker known for its low-cost SUVs designed for African terrains, has entered voluntary liquidation after nearly a year of unsuccessful rescue attempts. Backed by Playfair Capital, Mobius struggled with mounting debts, unpaid suppliers, and staff salaries.
The Decision to Liquidate
At a shareholder meeting on August 5, 2024, Mobius Motors resolved to liquidate under Section 393(1)(b) of the Insolvency Act. Nicolas Guibert, a Mobius director, announced the appointment of KVSK Sastry as the liquidator to oversee the winding-up process .
Background and Financial Struggles
Founded in 2009 by British national Joel Jackson, Mobius Motors aimed to produce durable, low-cost SUVs for small and medium enterprises (SMEs) in infrastructure, agribusiness, and supply sectors. The company’s mission was to provide affordable vehicles capable of handling Africa’s rough roads. Their first model, released in 2014, cost $10,000 (KES 1.3 million), significantly lower than the market prices of standard SUVs in Kenya .
Mobius raised $56 million across five funding rounds, with support from investors like Playfair Capital, Chandaria Industries, DFC, and PanAfrican Investment. Despite this substantial backing, the company couldn’t achieve sustainable growth. The introduction of Mobius II in 2018 and Mobius III in 2021 failed to capture a market dominated by cheaper, second-hand imports from the UK, Japan, and other Asian countries .
Market and Production Challenges
Mobius’s business model relied heavily on pre-orders with a refundable deposit of $384 (KES 50,000). This approach hinted at low market uptake, reflecting the challenges the company faced in gaining a foothold. Mobius began mass production in 2015, but competition from more established brands and the influx of affordable second-hand vehicles created a tough market environment .
Impact and Future Prospects
The liquidation of Mobius Motors underscores the difficulties faced by innovative startups in emerging markets, particularly in the automotive industry. While the company’s vision was compelling, the financial and operational hurdles proved insurmountable.
Conclusion
The story of Mobius Motors serves as a cautionary tale about the challenges of sustaining a niche automotive business in a competitive market. Despite significant investments and a clear market need, the company couldn’t overcome the financial and market pressures. The liquidation process will now focus on settling debts and addressing the obligations to stakeholders .