Kenya-based automobile manufacturer Mobius Motors has entered voluntary liquidation following unsuccessful rescue efforts over the past year. Backed by Playfair Capital, the company has faced difficulties settling supplier payments and paying salaries amid increasing operational debts.
“At a meeting of the shareholders held on 5 August 2024, it was resolved to place the company under liquidation as per Section 393(1) (b) of the Insolvency Act and appoint KVSK Sastry as the liquidator to wind up the company,” Mobius director Nicolas Guibert said in a notice.
CNN correspondent Larry Madowo revealed information from an insider indicating that the company was operating on limited resources and could not afford to lease its assembly plant. In fact, some employees were informed of their layoffs just a day before the business shut down.
“Mobius ran out of money and could barely make rent, let alone pay salaries. 45 employees only learnt yesterday that it was their last day and the firm was going out of business,” he shared.
Under Kenya’s Insolvency Act 2015, companies can opt for voluntary liquidation if the board passes a “special resolution” to initiate the process.
The company’s assets may be sold off to pay creditors, and any remaining funds are distributed to shareholders. The goal is to ensure an orderly and legal closure of the business.
Mobius Motors, having secured $56 million( Kshs 7.2 billion) through five funding rounds, aimed to become the first made-in-Kenya creator of cost-effective SUVs for entreprises involved in infrastructure, agribusiness, and supplies in remote regions where durable vehicles for rough terrain were required.
Established in 2009 by British entrepreneur Joel Jackson during his time in Kenya, Mobius Motors launched a rugged SUV model in 2014 designed specifically for African roads. Priced at $10,000 (KES 1.3 million), this model was notably more affordable than typical SUVs in the Kenyan market.
“The 4×4 SUV sits five occupants, and it is able to handle the roads we have in Kenya and Africa reliably,” said commercial director Michael Gichuru.
The startup manufactured 50 units of its first model and released the Mobius II and Möbius III in 2018 and 2021 respectively, as updates to the original. Despite these efforts, it could not compete with the Kenyan market, which was dominated by second-hand vehicles from the UK, Japan, and other Asian countries.
The company’s production was dependent on pre-orders, requiring a refundable deposit of $384 (Kshs 50,000). This structure may have contributed to the low market uptake of its models.
Mobius Motors started mass production in 2015 with the support of Playfair Capital, a UK-based venture capital firm. It also secured funding from Chandaria Industries, a Kenyan manufacturer, DFC, a U.S. government development corporation, and PanAfrican Investment, a private investment firm.
Kenyans have expressed their disappointment in the closure, criticizing the government for not investing in local industries such as Mobius Motors, which had the potential to become a major vehicle supplier in the country and reduce the need for vehicle imports.
