African Fintech M-KOPA raises $250 million
M-KOPA, a leading fintech platform, today announced that it successfully closed over $250 million in new debt and equity financing to expand its financial services offering to underbanked consumers across sub-Saharan Africa. This marks one of the largest combined debt and equity raises in the African technology sector, enabling M-KOPA to continue its rapid growth.
Over $200 million in sustainability-related debt financing was led and arranged by Standard Bank Group, Africa’s largest bank and long-term strategic partner of M-KOPA. Other participating 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. An additional $55 million in equity investment was supported by existing strategic investor Sumitomo Corporation, which is contributing $36.5 million to the total increase and will work closely with M-KOPA on new growth markets and products. Blue Haven Initiative, Lightrock, Broadscale Group and Latitude, the sister fund of Local Globe, also participated in the transaction.
M-KOPA fintech platform combines the power of digital micropayments with the Internet-of-Things (IoT) to give customers access to productive assets. In markets where individuals have limited existing financial identities and conventional collateral, M-KOPA’s flexible credit model allows individuals to pay a small deposit and gain immediate access to everyday necessities, including smartphones, electric motorcycles and solar power systems, and then upgrade to digital financial services such as loans and health insurance. M-KOPA’s solution builds credit into the product through a smart digital connection, giving customers immediate ownership, which they can pay off through micro-installments over time. The company has sold over 3 million of these products through a unique direct sales model that includes more than 10,000 agents.
M-KOPA’s operations started in East Africa and successfully expanded to Nigeria in 2021 and, more recently, Ghana. From 2020 to 2022, M-KOPA recorded a compound annual growth rate of 85% in new client acquisition and was recently recognized as one of Africa’s fastest growing top 100 companies by the Financial Times for two consecutive years, in 2022 and 2023. Today’s News Fall along with the business reaching over 3 million customers and providing over $1 billion in cumulative credit to underbanked customers in Africa. The company continues to scale rapidly and is on track to acquire another million customers by 2023.
With this new funding, the business aims to expand its smartphone services, expand its model into new markets and expand its funded product set. In line with M-KOPA and its partners’ long-standing commitment to creating a positive impact, the debt financing is structured to support sustainability-related goals with pricing linked to the achievement of environmental and social goals. Lendable was appointed as the loan base and sustainability verification agent for the debt transaction. M-KOPA will also use the funding to drive women’s economic inclusion and reduce greenhouse gas emissions in its East African markets by increasing smartphone ownership among women and further developing its offering of electric mobility solutions.
Speaking at the round, Jesse Moore, CEO and co-founder of M-KOPA, said, “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 $1 billion in accumulated credit to over 3 million customers, and proud of the thousands of local jobs we’ve created in tough economic times.As we continue to scale, we remain committed to building a sustainable business and closing financial and digital gender gap We are delighted to have the support of new and existing investors who share our vision and mission”.
“Supporting M-KOPA is in line with our purpose of driving sustainable growth for Africa and her people. Financial inclusion not only enables economic growth, it also accelerates it. In a short space of time, M-KOPA has been able to positively impact so many lives by enabling access to electricity and smartphone connectivity, which is an important part of enabling financial empowerment for all,” added Nick Riley, Corporate Financing Solutions at Standard Bank.
“As a strategic investor, we are very excited to accelerate business growth through collaborative efforts in business development. By leveraging each expertise and resource, we believe this partnership will have a positive impact on both the financial and telecommunication sectors, ultimately enriching people’s lives across the continent.” commented Masaki Nakajima, Senior Managing Officer, General Manager, Media & Digital Business Unit at Sumitomo Corporation.
