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As a Tunisian human rights activist within the 2000s, Amira Yahyaoui staged protests and blogged about authorities corruption. In interviews, she described being overwhelmed by the police. When she was 18, she stated, she was kidnapped from the road, dropped off on the Algerian border and positioned in exile for a number of years.
Ms. Yahyaoui’s compelling background helped her stand out amongst entrepreneurs when she moved in 2018 to San Francisco, the place she based a pupil help start-up referred to as Mos. The app hit the highest of Apple’s App Store, and Ms. Yahyaoui raised $56 million from high-profile buyers, together with Sequoia Capital, John Doerr and Steph Curry, in response to PitchBook, which tracks start-ups. Mos was valued at $400 million.
In podcasts, TV interviews and different media, Ms. Yahyaoui, 39, continuously mentioned Mos’s success.
Among different issues, she stated the start-up had helped 400,000 college students get monetary help. But inside firm information considered by The New York Times confirmed that as of early final yr, solely about 30,000 prospects had paid for Mos’s pupil help providers. The remainder of the 400,000 customers included anybody who had signed up for a free account and should have gotten an e-mail about making use of for pupil help, two folks acquainted with the state of affairs stated.
After Mos expanded into on-line banking in September 2021, Ms. Yahyaoui informed publications akin to TechCrunch that the corporate had greater than 100,000 financial institution accounts. But these accounts had very small quantities of cash in them, in response to the interior information. Less than 10 % of Mos’s roughly 153,000 financial institution customers had put their very own cash into their accounts, the info confirmed.
Some staff tried to talk up about Ms. Yahyaoui’s claims, stated Emi Tabb, who labored at Mos in operations and had roles akin to head of monetary help earlier than resigning in late 2022. But Ms. Yahyaoui dismissed and typically disparaged staff who tried pushing again towards her public feedback, 5 individuals who witnessed the incidents stated.
“She created a tradition of concern,” Mx. Tabb stated.
Mos is amongst a category of tech start-ups that rose in the course of the quick cash period of the late 2010s and early within the pandemic, when younger corporations landed tens of millions of {dollars} in funding with little greater than guarantees. Now as the cash has dried up and lots of tech start-ups grapple with a downturn, buyers are pickier, prospects are warier of daring claims and staff are extra suspicious of founder pronouncements.
Last yr, Mos laid off roughly half its employees of round 50 and shut down its banking service. The firm reverted to its authentic enterprise of serving to college students discover monetary help and started emphasizing its use of synthetic intelligence.
Ms. Yahyaoui referred inquiries to a Mos spokeswoman, who declined to remark. When Ms. Yahyaoui was requested final yr about Mos’s variety of customers, she posted on social media that feminine founders have been usually presumed responsible whereas male founders have been presumed harmless.
“Maybe in the present day we should always begin making use of presumption of innocence to additionally feminine founders,” she wrote.
This account of Mos was primarily based on interviews with eight present and former staff, in addition to inside communications, shows and analytics. The inside paperwork go as much as 2023.
Ms. Yahyaoui grew up in Tunisia after which lived in exile in France. After shifting to San Francisco, she raised cash for Mos from buyers together with Expa, the funding agency began by Garrett Camp, a founding father of Uber. Mos offered a service to assist college students discover sources of monetary help, charging $149 for every faculty yr.
Deena Shakir, an investor at Lux Capital, which backed Mos in 2020, stated she and the agency’s companions “deeply respect” Ms. Yahyaoui.
“We take satisfaction in supporting corporations and founders like Amira whose dedication to enabling entry for college students offers us hope for the way forward for increased training,” Ms. Shakir stated.
Mos had a sluggish begin, three folks with information of the corporate stated. Some college students who signed up realized about help they already knew about, like a Cal Grant for California residents, they stated.
An investor presentation considered by The Times confirmed that Mos had month-to-month income of $340,000 in December 2019. The start-up allowed customers to pay $1 upfront and the remaining $148 once they acquired their monetary help.
Mos in the end didn’t accumulate most of that cash. Seventy % of customers defaulted on their funds after the pandemic hit in 2020, Jess Lee, an investor at Sequoia who sits on Mos’s board, later stated in an article in regards to the firm printed on Sequoia’s web site.
As of late 2022, roughly 6,500 of Mos’s paying prospects, or 22 %, acquired refunds for its monetary help service, in response to inside information. The firm had informed prospects that in the event that they didn’t get 5 instances the price of Mos’s providers in monetary help, they might get a refund.
Mos said it may assist college students entry $160 billion in scholarships, however that quantity included loans, three folks acquainted with the state of affairs stated. The firm’s pitch was to assist college students keep away from debt.
Ms. Yahyaoui additionally stated college students who used Mos “saved” a median of $16,000. That was the quantity that the start-up decided they certified for and never what the scholars acquired in help, three folks with information of the corporate stated.
Mos’s web site features a shifting ticker of blissful prospects (“Jasmine acquired $12,237 for Cal Poly,” for instance). Ms. Yahyaoui requested staff to make use of inventory photographs and to make up names, three folks with information of the corporate stated.
By 2021, monetary expertise was scorching with buyers. Ms. Yahyaoui pushed Mos to develop into a financial institution, making its monetary help product free. That September, the start-up introduced its transfer into banking with a promotion that gave folks $5 to enroll and one other $5 for each referral.
Sign-ups poured in. Mos turned off the $5 promotion on its first day. Two months later, it turned it again on for 3 days and signed up greater than 100,000 accounts, spending round $1 million within the promotion and sending Mos to the highest of the App Store.
The sign-ups piqued investor curiosity, together with from the funding agency Tiger Global. Sequoia’s Ms. Lee needed to see how lots of the accounts that signed up in the course of the promotion remained lively earlier than investing extra, two folks acquainted with the state of affairs stated. Sequoia inspired Ms. Yahyaoui to rent an out of doors agency to evaluate whether or not the accounts belonged to actual folks, the folks stated.
Some staff additionally had considerations that many accounts didn’t belong to actual folks, three folks acquainted with the state of affairs stated. As sign-ups continued, Mos analyzed the accounts for probably fraudulent conduct in an inside working doc. In November, Ms. Yahyaoui restricted Ms. Lee’s entry to that doc, two of the folks stated.
Soon after, in February 2022, Tiger Global introduced it led a $40 million funding for Mos. Sequoia joined the deal. It isn’t clear what impression entry to the doc would have had on Sequoia’s choice to speculate extra in Mos. Two folks acquainted with the state of affairs stated Ms. Lee retained entry to a broader information supply relating to the accounts.
In an announcement, Ms. Lee stated: “The most profitable founders are those who’ve grit and are prepared to check new hypotheses and adapt. Amira is the embodiment of those qualities.”
Tiger Global declined to remark.
Alongside the funding announcement, Sequoia printed an article on its web site detailing Ms. Yahyaoui’s dramatic previous and entrepreneurial imaginative and prescient. It stated fewer than 1 % of Mos’s financial institution accounts had been closed, “an unheard-of statistic for a money-based sign-up promotion.”
Few folks used the financial institution accounts, in response to inside information considered by The Times. Of roughly 153,000 open accounts, 95 % had lower than $5 in them and a 3rd had a stability of zero via 2022, the info confirmed. Just 9.5 % of account holders deposited cash into their accounts throughout that point.
Mos informed its board that 74 % of checking account holders have been college students, in response to a presentation considered by The Times. But solely round 20 % have been 22 or youthful, in response to inside information, with about 45 % over the age of 30. Mos’s income from transaction charges, which made up the overwhelming majority of the corporate’s whole revenue after it grew to become a financial institution, was lower than $70,000 for the primary 9 months of 2022, two folks acquainted with the funds stated.
Ms. Yahyaoui typically berated her high managers and threatened to fireplace them if their efficiency didn’t enhance, in response to 5 individuals who witnessed such occasions.
Using expletives, she wrote in a January 2022 message to staff that the corporate’s mission was meaningless “due to how dangerous we’re at getting” stuff carried out.
“I would like folks I can rely on to beat my desires to not decrease them,” she wrote.
Ms. Yahyaoui’s remedy of staff — together with staff employed in Tunisia and Algeria — ran counter to her picture as an activist, Mx. Tabb stated.
At an worker gathering in September 2022, a Mos worker requested Sequoia’s Ms. Lee about her largest concern for the start-up, three individuals who attended stated. Ms. Lee initially stated she was shocked by how good morale was given the circumstances, then added that it wasn’t clear what Mos’s product can be.
The start-up was at extra of a “seed stage,” or very early in its improvement, Ms. Lee stated.
