As a human rights activist in Tunisia in the 2000s, Amira Yahyaoui staged protests and blogged about government corruption. In her interview she said that she was beaten by the police. When she was 18, she said, she was kidnapped from the street, dropped off at the Algerian border and forced into exile for several years.
Yahyaoui's strong resume helped her stand out among entrepreneurs when she moved to San Francisco in 2018, where she founded a student-backed startup called Mos. The app is at the top of Apple's App Store, and Yahyaoui has raised $56 million from high-profile investors including Sequoia Capital, John Doerr and Stephen Curry, according to PitchBook, which tracks startups. . Moss was valued at $400 million.
In podcasts, TV interviews and other media, Yahyaoui, 39, frequently spoke about Moss' success.
Among other things, she said the startup has helped 400,000 students receive financial aid. But as of early last year, only about 30,000 customers had paid for Moss' student support services, according to internal data reviewed by The New York Times. The remaining 400,000 users included people who signed up for free accounts and may have received emails about applying for student aid, two people familiar with the situation said.
After Mos expanded into online banking in September 2021, Yahyaoui told publications such as TechCrunch that the company had more than 100,000 bank accounts. However, internal data shows that these accounts contained minuscule amounts of funds. Less than 10% of Moss' approximately 153,000 bank customers deposited money into their accounts themselves, the data showed.
Emi Tabb, who was in charge of operations at Moss and held roles such as financial aid director until resigning at the end of 2022, said some employees tried to speak out about Yahyaoui's claims. Yahyaoui said he fired and sometimes belittled employees who tried to fight back. Five people who witnessed the incident said they objected to her public comment.
“She created a culture of fear,” MX says. Tab said.
Moss is a type of tech startup that emerged during the fast money era of the late 2010s and early pandemic years, when young companies raised millions of dollars in funding with more than promise. Now, as funding dries up and many tech startups face recession, investors are becoming more selective, customers are wary of bold claims, and employees are becoming more suspicious of what founders say. .
Last year, Moss laid off about half of its 50 employees and shut down its banking services. The company has returned to its original business of helping students find financial aid and has begun emphasizing the use of artificial intelligence.
Yahyaoui referred questions to a Moss spokesperson, who declined to comment. When Yahyaoui was asked last year about the number of Mos users, he replied: Posted On social media, female founders are often presumed guilty, while male founders are often presumed innocent.
“Maybe we should start extending the presumption of innocence to female founders today,” she wrote.
This Mos account is based on interviews with eight current and former employees, internal communications, presentations, and analysis. Internal documents exist until 2023.
Yahyaoui grew up in Tunisia and later lived in exile in France. After she moved to San Francisco, she raised money for Moss from investors including Expa, the investment firm founded by Uber founder Garrett Camp. Moss provided services to help students find sources of financial aid, and for each academic year she charged $149.
Lux Capital investor Deena Shakir, who backed Mr. Moss in 2020, said she and the firm's partners “deeply respect” Mr. Yahyaoui.
“We are proud to support companies and founders like Amira whose commitment to enabling student access gives us hope for the future of higher education,” Shakir said.
Moss was a late starter, according to three people familiar with the company. Some students who enrolled learned about aid they already knew about, such as the California Grant for California residents, he said.
Moss earned $340,000 a month in December 2019, according to an investor presentation seen by The Times. The startup allowed users to pay $1 upfront and the remaining $148 when they received funding.
In the end, Moss was unable to recover most of the money. After the pandemic hit in 2020, 70% of users missed payments, Sequoia investor and Moss board member Jess Lee said in an article about the company later published on Sequoia's website. I mentioned it inside.
As of the end of 2022, about 6,500 Mos paying customers, or 22%, had received refunds for financial aid services, according to internal data. The company told customers they could receive a refund if they were unable to receive financial assistance worth five times the cost of Moss' services.
moss Said It could help students receive $160 billion in scholarships, but that number also includes loans, three people familiar with the matter said. The company's pitch was to help students avoid debt.
Yahyaoui also said students who used Mos “saved” an average of $16,000. Three people familiar with the company said this was the amount the startups determined they were eligible for, not the amount of aid received by the students.
Moss' website includes moving tickers of happy customers (for example, “Jasmine won $12,237 at Cal Poly”). Yahyaoui asked employees to use stock photos and fabricate names, three people familiar with the company said.
By 2021, financial technology was gaining traction among investors. Yahyaoui promoted Moss as a bank and made financial assistance products free. In September of the same year, the startup announced its entry into the banking industry with a promotion giving away $5 for signing up and an additional $5 for each referral.
Oversubscribed, Moss ended the $5 promotion on the first day. Two months later, he activated it again for three days and he registered over 100,000 accounts and spent about $1 million on promotions, sending Mos to the top of his App Store.
The sign-up sparked interest from investors, including investment firm Tiger Global. Sequoia's Mr. Lee wanted to see how many accounts signed up during the promotion remained active before making any additional investments, according to two people familiar with the matter. That's what it means. Sequoia encouraged Yahyaoui to hire an outside firm to assess whether the accounts belonged to real people, the people said.
Some employees were concerned that many of the accounts did not belong to real people, according to three people familiar with the situation. As sign-ups continued, Moss analyzed potentially fraudulent accounts in internal working documents. Mr. Yahyaoui restricted Mr. Lee's access to the documents in November, two people familiar with the matter said.
Shortly after, in February 2022, Tiger Global announced it had led a $40 million financing for Moss. Sequoia also joined the deal. It's unclear how access to this document influenced Sequoia's decision to invest more in Moss. Mr. Lee maintained access to a wide range of data sources about the account, two people familiar with the situation said.
Lee said in a statement: “The most successful founders are those who have guts and are willing to test and adapt new hypotheses. Amira embodies these qualities.”
Tiger Global declined to comment.
Alongside the funding announcement, Sequoia published an article on its website detailing Yahyaoui's dramatic past and entrepreneurial vision. Less than 1% of Moss' bank accounts were closed, the paper said, “an unprecedented statistic for a cash-based sign-up promotion.”
Few people used their bank accounts, according to internal data seen by The Times. Of the approximately 153,000 accounts opened, 95% have account balances of less than $5, and one-third will have zero balances until 2022, according to the data. Only 9.5% of account holders deposited funds into their accounts during that period.
According to a presentation seen by The Times, Moss told the board that 74% of its bank account holders were students. However, internal data shows that only about 20% were under the age of 22, and about 45% were over 30. Moss' income from transaction fees, which had made up the bulk of the company's total revenue since it became a bank, was less. It is expected to exceed $70,000 in the first nine months of 2022, two people familiar with the finances said.
Mr. Yahyaoui sometimes scolded top management and threatened to fire them if business performance did not improve, according to five people who witnessed the events.
In a January 2022 message to employees, she wrote, using name-calling, that the company's mission was meaningless “because of how bad we are at getting the job done.”
“I need someone I can trust who will help me achieve my dreams instead of lowering them,” she wrote.
Ms. Yahyaoui's treatment of her employees, including those employed in Tunisia and Algeria, contradicted her image as an activist. Tab said.
At a staff meeting in September 2022, Moss employees asked Sequoia's Lee about their biggest concerns about the startup, according to three people who attended. Lee initially said he was surprised by the high morale given the situation, then added that it was unclear what Moss' product would be like.
Lee said the startup was in the “seed stage,” or very early stages of development.