Mobius Motors, a Kenyan automaker known for its budget-friendly SUVs, has initiated voluntary liquidation after almost a year of unsuccessful attempts to rescue the company.
Mounting operational debts and difficulties paying suppliers and salaries have contributed to the company’s financial woes.
Shareholder Decision and Liquidation Process
In a notice, Mobius Director Nicolas Guibert announced, “At a shareholder meeting on August 5, 2024, a resolution was passed to place the company under liquidation in accordance with Section 393(1)(b) of the Insolvency Act and appoint KVSK Sastry as the liquidator to wind up the company.”
Legal Framework for Liquidation
Kenya’s Insolvency Act of 2015 provides a legal framework for companies to wind up voluntarily if the board passes a special resolution to that effect.
Targeting SMEs in Remote Areas
Mobius, having raised a total of $56 million across five funding rounds, focused on manufacturing affordable SUVs designed for small and medium-sized enterprises (SMEs) operating in infrastructure, agribusiness, and supply sectors in remote areas.
These vehicles were engineered to withstand rugged terrains and challenging conditions.
Pioneering Affordable SUVs for African Roads
Founded in 2009 by Joel Jackson, a British national working in Kenya, Mobius introduced a stripped-down SUV model “built for African roads” in 2014.
This first model was priced at $10,000 (KES1.3 million), significantly undercutting the market prices of standard SUVs in Kenya.
Challenges in the Kenyan Market
The startup initially produced 50 units of its first model, followed by the launch of Mobius II and Mobius III in 2018 and 2021, respectively.
However, the company struggled to gain a foothold in the Kenyan car market, which is saturated with second-hand imports from the UK, Japan, and other Asian countries.
Pre-Order Model and Low Uptake
Mobius’ production model was tied to pre-orders with a refundable deposit of $384 (KES50,000), suggesting that the market uptake of its models may have been limited.
Funding and Mass Production
The company began mass production in 2015 after securing the backing of Playfair Capital, a UK-based venture capital firm. Mobius also received funding from various sources, including Chandaria Industries (a Kenyan manufacturer), DFC (a US government development corporation), and PanAfrican Investment (a private investment firm).