As a Tunisian human rights activist within the 2000s, Amira Yahyaoui staged protests and blogged about authorities corruption. In interviews, she described being crushed by the police. When she was 18, she said, 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 support start-up known as Mos. The app hit the highest of Apple’s App Retailer, and Ms. Yahyaoui raised $56 million from high-profile traders, together with Sequoia Capital, John Doerr and Steph Curry, in accordance with PitchBook, which tracks start-ups. Mos was valued at $400 million.

In podcasts, TV interviews and different media, Ms. Yahyaoui, 39, steadily mentioned Mos’s success.

Amongst different issues, she said the start-up had helped 400,000 college students get monetary support. However inside firm information considered by The New York Instances confirmed that as of early final 12 months, solely about 30,000 prospects had paid for Mos’s pupil support companies. 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 support, two individuals aware of the state of affairs mentioned.

After Mos expanded into on-line banking in September 2021, Ms. Yahyaoui instructed publications comparable to TechCrunch that the corporate had greater than 100,000 financial institution accounts. However these accounts had very small quantities of cash in them, in accordance with the inner information. Lower than 10 p.c of Mos’s roughly 153,000 financial institution customers had put their very own cash into their accounts, the information confirmed.

Some staff tried to talk up about Ms. Yahyaoui’s claims, mentioned Emi Tabb, who labored at Mos in operations and had roles comparable to head of monetary support earlier than resigning in late 2022. However Ms. Yahyaoui dismissed and typically disparaged staff who tried pushing again in opposition to her public feedback, 5 individuals who witnessed the incidents mentioned.

“She created a tradition of concern,” Mx. Tabb mentioned.

Mos is amongst a category of tech start-ups that rose throughout the quick cash period of the late 2010s and early within the pandemic, when younger corporations landed hundreds of thousands 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, traders are pickier, prospects are warier of daring claims and staff are extra suspicious of founder pronouncements.

Final 12 months, Mos laid off roughly half its workers of round 50 and shut down its banking service. The corporate reverted to its authentic enterprise of serving to college students discover monetary support 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 12 months about Mos’s variety of customers, she posted on social media that feminine founders had been typically presumed responsible whereas male founders had been presumed harmless.

“Perhaps at present we must always begin making use of presumption of innocence to additionally feminine founders,” she wrote.

This account of Mos was based mostly on interviews with eight present and former staff, in addition to inside communications, displays and analytics. The interior 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 traders 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 support, charging $149 for every faculty 12 months.

Deena Shakir, an investor at Lux Capital, which backed Mos in 2020, mentioned she and the agency’s companions “deeply respect” Ms. Yahyaoui.

“We take delight in supporting corporations and founders like Amira whose dedication to enabling entry for college students provides us hope for the way forward for larger schooling,” Ms. Shakir mentioned.

Mos had a gradual begin, three individuals with data of the corporate mentioned. Some college students who signed up realized about support they already knew about, like a Cal Grant for California residents, they mentioned.

An investor presentation considered by The Instances confirmed that Mos had month-to-month income of $340,000 in December 2019. The beginning-up allowed customers to pay $1 upfront and the remaining $148 once they acquired their monetary support.

Mos finally didn’t acquire most of that cash. Seventy p.c 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 said in an article concerning the firm revealed on Sequoia’s web site.

As of late 2022, roughly 6,500 of Mos’s paying prospects, or 22 p.c, acquired refunds for its monetary support service, in accordance with inside information. The corporate had instructed prospects that in the event that they didn’t get 5 instances the price of Mos’s companies in monetary support, they may get a refund.

Mos said it may assist college students entry $160 billion in scholarships, however that quantity included loans, three individuals aware of the state of affairs mentioned. The corporate’s pitch was to assist college students keep away from debt.

Ms. Yahyaoui also said students who used Mos “saved” a mean of $16,000. That was the quantity that the start-up decided they certified for and never what the scholars obtained in support, three individuals with data of the corporate mentioned.

Mos’s website features a shifting ticker of pleased 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 individuals with data of the corporate mentioned.

By 2021, monetary know-how was sizzling with traders. Ms. Yahyaoui pushed Mos to turn out to be a financial institution, making its monetary support product free. That September, the start-up introduced its transfer into banking with a promotion that gave individuals $5 to enroll and one other $5 for each referral.

Signal-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 Retailer.

The sign-ups piqued investor curiosity, together with from the funding agency Tiger World. Sequoia’s Ms. Lee wished to see how lots of the accounts that signed up throughout the promotion remained lively earlier than investing extra, two individuals aware of the state of affairs mentioned. Sequoia inspired Ms. Yahyaoui to rent an out of doors agency to evaluate whether or not the accounts belonged to actual individuals, the individuals mentioned.

Some staff additionally had considerations that many accounts didn’t belong to actual individuals, three individuals aware of the state of affairs mentioned. As sign-ups continued, Mos analyzed the accounts for probably fraudulent habits in an inside working doc. In November, Ms. Yahyaoui restricted Ms. Lee’s entry to that doc, two of the individuals mentioned.

Quickly after, in February 2022, Tiger World introduced it led a $40 million funding for Mos. Sequoia joined the deal. It’s not clear what impression entry to the doc would have had on Sequoia’s resolution to speculate extra in Mos. Two individuals aware of the state of affairs mentioned Ms. Lee retained entry to a broader information supply relating to the accounts.

In a press release, Ms. Lee mentioned: “Probably 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 World declined to remark.

Alongside the funding announcement, Sequoia revealed an article on its website detailing Ms. Yahyaoui’s dramatic previous and entrepreneurial imaginative and prescient. It mentioned fewer than 1 p.c of Mos’s financial institution accounts had been closed, “an unheard-of statistic for a money-based sign-up promotion.”

Few individuals used the financial institution accounts, in accordance with inside information considered by The Instances. Of roughly 153,000 open accounts, 95 p.c had lower than $5 in them and a 3rd had a stability of zero by means of 2022, the information confirmed. Simply 9.5 p.c of account holders deposited cash into their accounts throughout that point.

Mos instructed its board that 74 p.c of checking account holders had been college students, in accordance with a presentation considered by The Instances. However solely round 20 p.c had been 22 or youthful, in accordance with inside information, with about 45 p.c 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 individuals aware of the funds mentioned.

Ms. Yahyaoui typically berated her prime managers and threatened to fireplace them if their efficiency didn’t enhance, in accordance with 5 individuals who witnessed such occasions.

Utilizing 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 completed.

“I would like individuals I can rely on to beat my desires to not decrease them,” she wrote.

Ms. Yahyaoui’s therapy of staff — together with staff employed in Tunisia and Algeria — ran counter to her picture as an activist, Mx. Tabb mentioned.

At an worker gathering in September 2022, a Mos worker requested Sequoia’s Ms. Lee about her greatest concern for the start-up, three individuals who attended mentioned. Ms. Lee initially mentioned she was stunned by how good morale was given the circumstances, then added that it wasn’t clear what Mos’s product can be.

The beginning-up was at extra of a “seed stage,” or very early in its growth, Ms. Lee mentioned.



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