As a Tunisian human rights activist in the 2000s, Amira Yahyaoui organized protests and blogged about government corruption. In interviews, she described being beaten by the police. When she was 18, she said, she was kidnapped off the street, dropped off at the Algerian border and exiled for several years.
Ms. Yahyaoui’s fascinating background helped her stand out among entrepreneurs when she moved to San Francisco in 2018, where she founded a student aid start-up called Mos. The app shot to the top of Apple’s App Store, and Ms. Yahyaoui raised $56 million from high-profile investors including Sequoia Capital, John Doerr and Steph Curry, according to PitchBook, which tracks startups. Mos was valued at $400 million.
In podcasts, television interviews and other media outlets, Ms. Yahyaoui, 39, has often discussed Mos’s success.
Among other things, he said the start-up has helped 400,000 students get financial aid. But internal company figures seen by The New York Times showed that as of early last year, only about 30,000 customers had paid for Mos’s student aid services. The rest of the 400,000 users included anyone who signed up for a free account and may have received an email about applying for student aid, two people familiar with the situation said.
After Mos expanded 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 had very small amounts of money, according to internal data. Less than 10 percent of Mos’ roughly 153,000 bank users had put their own money into their accounts, the data showed.
Some employees tried to speak out about Ms. Yahyawi’s allegations, said Amy Tabb, who worked at Mos in operations and held roles such as head of financial aid before stepping down in late 2022. But Ms. Yahyawi fired and sometimes disparaged employees who tried to push back against her public comments, said five people who witnessed the incidents.
“It created a culture of fear,” Mx said. Tabb said.
Mos is among a class of tech startups that grew during the fast-money era of the late 2010s and early pandemic, when startups got millions of dollars in funding with little more than promises. Now that money has dried up and many tech startups are facing a downturn, investors are more selective, customers are more wary of bold claims, and employees are more suspicious of founders’ statements.
Last year, Mos laid off about half its staff of about 50 people and closed its banking service. The company returned to its original business of helping students find financial aid and began emphasizing the use of artificial intelligence.
Ms Yahyaoui referred questions to a spokesman for Mos, who declined to comment. When Ms Yahyaoui was asked last year about the number of Mos users, she was posted on social media that female founders were often seen as guilty while male founders were seen as innocent.
“Maybe today we should start applying the presumption of innocence to female founders as well,” she wrote.
This Mos account was based on interviews with eight current and former employees, as well as internal communications, presentations and analysis. Internal documents reach up to 2023.
Ms Yahyaoui grew up in Tunisia and then lived in exile in France. After moving to San Francisco, he raised money for Mos from investors including Expa, the investment firm started by Uber founder Garrett Camp. Mos provided a service to help students find sources of financial aid, charging $149 for each school 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 facilitating student access gives us hope for the future of higher education,” said Ms. Shakir.
Mos has had a slow start, three people with knowledge of the company said. Some students who enrolled learned about aid they already knew about, such as a Cal Grant for California residents, they said.
An investor presentation seen by The Times showed that Mos had monthly revenue of $340,000 as of December 2019. The startup allowed users to pay $1 upfront and the remaining $148 when they received their funding.
Mos ultimately didn’t raise most of that money. Seventy percent of users defaulted after the pandemic hit in 2020, Jess Lee, a Sequoia investor who sits on Mos’s board, later said in an article about the company published on Sequoia’s website.
As of late 2022, about 6,500 of Mos’ paying customers, or 22 percent, received refunds for the financial aid service, according to internal data. The company had told customers that if they didn’t get five times the cost of Mos’ services in financial aid, they could get a refund.
No he said could help students access $160 billion in scholarships, but that amount included loans, three people familiar with the situation said. The company’s goal was to help students avoid debt.
Ms Yahyaoui also said students who used Mos “saved” an average of $16,000. That was the amount the startup determined qualified for, not what the students received in aid, three people with knowledge of the company said.
Mos’s website includes a touching list of happy customers (for example, “Jasmine took home $12,237 for Cal Poly”). Ms. Yahyaoui asked employees to use stock photos and make up names, three people with knowledge of the company said.
By 2021, fintech was hot with investors. Ms Yahyaoui pushed Mos to become a bank, making the financial aid product free. That September, the start-up announced its move into banking with a promotion that gave people $5 to sign up and another $5 for each referral.
Registrations have arrived. Mos disabled the $5 offer on the first day. Two months later, he reactivated it for three days and signed up more than 100,000 accounts, spending about $1 million on promotion and sending Mos to the top of the App Store.
The listings have piqued the interest of investors, including investment firm Tiger Global. Sequoia’s Ms. Lee wanted to see how many of the accounts signed up during the promotion remained active before investing more, two people familiar with the situation said. Sequoia encouraged Ms. Yahyaoui to hire an outside firm to assess whether the accounts belonged to real people, the people said.
Some employees also had concerns that many accounts did not belong to real people, three people familiar with the situation said. As the records continued, Mos analyzed the accounts for possible fraudulent behavior in an internal working paper. In November, Ms. Yahyaoui restricted Ms. Lee’s access to that document, two of the people said.
Soon after, in February 2022, Tiger Global announced that it had led a $40 million funding round for Mos. Sequoia joined the deal. It is unclear what impact access to the document would have had on Sequoia’s decision to invest more in Mos. Two people familiar with the situation said Ms. Li retained access to a broader source of data about the accounts.
In a statement, Ms Lee said: “The most successful founders are those who have courage and are willing to try new things 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 background and entrepreneurial vision. He said less than 1 percent of Mos’s bank accounts had been closed, “an unprecedented 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 open accounts, 95 percent had less than $5 in them and a third had zero balances by 2022, the data showed. Just 9.5 percent of account holders deposited money into their accounts during this period.
Mos told her board that 74 percent of bank account holders were students, according to a presentation seen by the Times. But only about 20 percent were 22 or younger, according to internal data, with about 45 percent over 30. Mos’s revenue from transaction fees, which made up the vast majority of the company’s total revenue after becoming a bank, was less than $70,000 for the first nine months of 2022, two people with knowledge of the finances 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 such events.
Using expletives, he wrote in a January 2022 message to employees that the company’s mission didn’t make sense “because of how bad we are at getting things done.”
“I need people I can count on to beat my dreams so I don’t let them down,” she wrote.
Ms. Yahyaoui’s treatment of employees — including workers hired in Tunisia and Algeria — ran counter to her image as an activist, Mx. Tabb said.
At an employee gathering in September 2022, a Mos employee asked Sequoia’s Ms. Li about her biggest concern about the startup, three people who attended said. Ms Lee initially said she was surprised by how good morale was, then added that it was not clear what Mos’s product would be.
The startup was more in the “startup stage,” or very early in its development, Ms. Lee said.
