As a Tunisian human rights activist in the 2000s, Amira Yahyaoui organized protests and wrote a blog about government corruption. In interviews, she described being beaten by police. When she was 18, she saidshe was kidnapped from the street, dropped off at the Algerian border and placed in exile for several years.
Ms. Yahyaoui’s compelling background helped her stand out among entrepreneurs when she moved in 2018 to San Francisco, where she founded a student aid startup called Mos. The app reached the top of Apple’s App Store, and Yahyaoui raised $56 million from high-profile investors including Sequoia Capital, John Doerr and Steph Curry, according to PitchBook, which tracks startups. ups. Mos was valued at $400 million.
In podcasts, television interviews and other media, Ms. Yahyaoui, 39, has frequently spoken about Mos’ success.
Among others, She said the start-up had helped 400,000 students obtain financial aid. But internal company data seen by The New York Times showed that as of early last year, only about 30,000 customers had paid for Mos’ student support services. The rest of the 400,000 users included anyone who signed up for a free account and may have received an email about a student aid request, two people familiar with the matter said.
After Mos launched into online banking in September 2021, Ms Yahyaoui told publications such as TechCrunch that the company had more than 100,000 bank accounts. But those accounts contained very small amounts of money, according to internal data. Fewer than 10 percent of Mos’ banks’ approximately 153,000 users had deposited their own money into their accounts, the data showed.
Some employees tried to speak out about Ms. Yahyaoui’s claims, said Emi Tabb, who worked at Mos in operations and held positions such as financial aid manager before resigning at the end of 2022. But Ms. Yahyaoui fired and sometimes denigrated employees who tried to push back. against his public comments, said five people who witnessed the incidents.
“She created a culture of fear,” Mx said. Tabb said.
Mos is part of a class of tech startups that emerged in the late 2010s and early days of the pandemic, when young companies secured millions of dollars in funding with little more than promises. Today, as money has dried up and many tech startups struggle with an economic downturn, investors are more picky, customers are wary of bold claims, and employees are more wary of statements of the founders.
Last year, Mos laid off about half of its staff of about 50 and closed its banking services. The company returned to its original business of helping students find financial aid and began emphasizing the use of artificial intelligence.
Ms. Yahyaoui referred her questions to a spokeswoman for Mos, who declined to comment. When Ms. Yahyaoui was asked last year about the number of Mos users, she job on social media, female founders were often presumed guilty while male founders were presumed innocent.
“Perhaps today we should start applying the presumption of innocence also to female founders,” she wrote.
This account by Mos was based on interviews with eight current and former employees, as well as internal communications, presentations and analysis. Internal documents go until 2023.
Ms. Yahyaoui grew up in Tunisia then lived in exile in France. After moving to San Francisco, she raised money for Mos from investors including Expa, the investment firm started by Garrett Camp, one of Uber’s founders. Mos provided a service to help students find sources of financial aid, charging $149 for each academic year.
Deena Shakir, an investor at Lux Capital, which backed Mos in 2020, said she and the firm’s partners “deeply respect” Ms. Yahyaoui.
“We are proud to support companies and founders like Amira, whose commitment to student access gives us hope for the future of higher education,” Ms. Shakir said.
Mos has had a slow start, three people with knowledge of the company said. Some students who signed up discovered aid they already knew existed, like a Cal Grant for California residents, they said.
An investor presentation viewed by The Times showed that Mos had a monthly income of $340,000 as of December 2019. The startup allowed users to pay $1 up front and the remaining $148 when they got their financial aid .
Mos ultimately didn’t raise most of that money. Seventy percent of users defaulted after the 2020 pandemic, Jess Lee, an investor at Sequoia who serves on Mos’ board of directors, said later in an article about the company published on the Sequoia website.
By the end of 2022, about 6,500 of Mos’ paying customers, or 22%, had received a refund for its financial aid service, according to internal data. The company had told its customers that if they did not receive financial assistance five times the cost of Mos’ services, they could get a refund.
Mos said It could help students access $160 billion in grants, but that amount included loans, three people familiar with the matter said. The company’s goal was to help students avoid debt.
Ms. Yahyaoui Also said students those who used Mos “saved” an average of $16,000. That’s the amount the startup determined they were entitled to, not what the students received in aid, three people with knowledge of the company said.
The Mos website includes a moving ticker from happy customers (“Jasmine received $12,237 for Cal Poly,” for example). Ms. Yahyaoui asked employees to use stock photos and make up names, three people with knowledge of the company said.
In 2021, financial technology was very popular among investors. Ms. Yahyaoui pushed Mos to become a bank, making its financial aid product free. In September, the startup announced its move into banking with a promotion that offered users $5 to sign up and an additional $5 for each referral.
Registrations poured in. Mos disabled the $5 promotion on day one. Two months later, he turned it back on for three days and registered more than 100,000 accounts, spending about $1 million on promotion and propelling Mos to the top of the App Store.
These listings have attracted interest from investors, including investment company Tiger Global. Ms. Lee of Sequoia wanted to see how many accounts signed up during the promotion remained active before investing further, two people familiar with the matter said. Sequoia encouraged Ms. Yahyaoui to hire an outside firm to assess whether the accounts belonged to real people, the sources said.
Some employees also were concerned that many accounts did not belong to real people, three people familiar with the matter said. As signups continued, Mos analyzed the accounts for potentially fraudulent behavior in an internal discussion paper. In November, Ms. Yahyaoui restricted Ms. Lee’s access to the document, two of the people said.
Shortly after, in February 2022, Tiger Global announced that it had led $40 million in funding for Mos. Sequoia joined the agreement. It’s unclear what impact access to the document would have had on Sequoia’s decision to invest more in Mos. Two people familiar with the matter said Ms. Lee retained access to a broader source of data regarding the accounts.
In a statement, Ms Lee said: “The most successful founders are those who have courage and are willing to test new hypotheses and adapt. Amira is the embodiment of these qualities.
Tiger Global declined to comment.
Alongside the funding announcement, Sequoia published an article on its website detailing Ms. Yahyaoui’s dramatic past and entrepreneurial vision. It says less than 1 percent of Mos’ bank accounts have been closed, “an unheard-of statistic for a money-based sign-up promotion.”
Few people used the bank accounts, according to internal data seen by The Times. Of about 153,000 accounts opened, 95% held less than $5 and a third had a zero balance through 2022, the data showed. Only 9.5% of account holders deposited money into their accounts during this period.
Mos told his board that 74 percent of bank account holders were students, according to a presentation seen by The Times. But according to internal data, only about 20% were 22 or younger, and about 45% were over 30. Mos’ revenue from transaction fees, which made up the vast majority of the company’s total revenue after it became a bank, was lower. more than $70,000 for the first nine months of 2022, two people familiar with the matter said.
Ms. Yahyaoui sometimes berated her top executives and threatened to fire them if their performance did not improve, according to five people who witnessed these events.
Using expletives, she wrote in a message to employees in January 2022 that the company’s mission was meaningless “because of our difficulty in doing” things.
“I need people I can count on to make my dreams come true, not crush them,” she wrote.
Ms. Yahyaoui’s treatment of employees – particularly workers hired in Tunisia and Algeria – went against her image as an activist, Mx. Tabb said.
At an employee meeting in September 2022, a Mos employee asked Sequoia’s Ms. Lee about her biggest concern about the startup, three people present said. Ms. Lee initially said she was surprised by the good morale given the circumstances, then added that it was not clear what Mos’ product would be.
The startup was more at a “seed stage,” or very early in its development, Ms. Lee said.
