M-KOPA Raises $250M to Expand Consumer Fintech Across Africa

M-KOPA successfully obtained over $250 million in new debt and equity funding to expand its financial services offering to underbanked consumers in Sub-Saharan Africa. This is one of the largest debt and equity raises in the African tech sector, allowing M-KOPA to continue its rapid growth.

Standard Bank Group, Africa’s largest bank and a long-term strategic partner to M-KOPA, led and arranged over $200 million in sustainability-linked debt financing. Other lenders include the International Finance Corporation (IFC), funds managed by Lion’s Head Global Partners, FMO: Dutch Entrepreneurial Development Bank, British International Investment, Mirova SunFunder, and Nithio. Sumitomo Corporation, an existing strategic investor, is contributing $36.5 million to the total raise and will work closely with M-KOPA on new growth markets and products. Blue Haven Initiative, Lightrock, Broadscale Group, and Latitude, Local Globe’s sister fund, all participated in the transaction.

M-KOPA’s fintech platform combines the power of digital micropayments with the Internet-of-Things (IoT) to provide customers with access to productive assets. In markets where individuals have limited pre-existing financial identities and conventional collateral, M-KOPA’s flexible credit model allows individuals to pay a small deposit and gain instant access to everyday necessities such as smartphones, electric motorcycles, and solar power systems, and then progress to digital financial services such as loans and health insurance. M-KOPA’s solution integrates credit into the product via a smart digital connection, giving customers instant ownership that they can pay off in micro-instalments over time. The company has sold over 3 million of these products through a unique direct sales model that includes over 10,000 agents.

M-KOPA’s operations began in East Africa and were successfully expanded to Nigeria in 2021 and, more recently, Ghana. M-KOPA experienced a compound annual growth rate of 85% in new customer acquisition from 2020 to 2022, and was recently named one of Africa’s Fastest-Growing Top 100 companies by the Financial Times for two consecutive years, in 2022 and 2023.

With this new funding, the company intends to expand its smartphone services, expand its model to new markets, and expand its financed product set. In keeping with M-KOPA and its partners’ long-standing commitment to making a positive difference, the debt financing is structured to support sustainability-related goals, with pricing tied to the achievement of environmental and social targets. Lendable was chosen as the debt transaction’s Borrowing Base and Sustainability Verification Agent. M-KOPA will also use the funding to increase women’s financial inclusion and reduce greenhouse gas emissions in its East African markets by increasing smartphone ownership among women and expanding its electric mobility solutions offering, respectively.

Jesse Moore, CEO and Co-founder of M-KOPA, stated during the round, “At M-KOPA, we are working hard to create a positive environmental and social impact by systematically addressing the barriers to digital financial services. We have already unlocked $1bn in cumulative credit to over 3 million customers, and are proud of the thousands of local jobs we’ve created during tough economic times. As we continue to scale we remain committed to building a sustainable business and closing economic and digital gender gaps. We are delighted to have the support of new and existing investors who share our vision and mission”.

Today’s announcement coincides with the company reaching over 3 million customers and providing over $1 billion in cumulative credit to Africa’s underbanked customers. The company is rapidly expanding and on track to acquire an additional million customers by the end of 2023.

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