M-KOPA has today announced it successfully closed over $250M in new debt and equity funding 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 tech sector, enabling M-KOPA to continue its rapid growth.
Over $200M in sustainability-linked debt financing was led and arranged by Standard Bank Group, Africa’s largest bank, and long-term strategic partner to 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.
A further $55M in equity investment was backed by existing strategic investor Sumitomo Corporation, which is contributing $36.5M to the total raise and will engage closely with M-KOPA on new growth markets and products. Blue Haven Initiative, Lightrock, Broadscale Group, and Latitude, the sister fund to Local Globe, also participated in the transaction.
With this new funding, M-KOPA aims to grow its smartphone services, expand its model to new markets and extend its financed product set. M-KOPA will also use the financing to drive women’s financial inclusion and reduce greenhouse gas emissions in its East African markets by increasing smartphone ownership among women and further developing its electric mobility solutions offering, respectively.
. In line with M-KOPA and its partners’ longstanding commitment to creating a positive impact, the debt financing is structured to support sustainability-linked goals with pricing that is linked to the achievement of environmental and social targets.
Jesse Moore, M-KOPA CEO and Co-founder said they are working hard to create a positive environmental and social impact by systematically addressing the barriers to digital financial services. He remarked that they 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.
While speaking of the round, he said “M-KOPA is delighted to have the support of new and existing investors who share our vision and mission. As we continue to scale we remain committed to building a sustainable business and closing economic and digital gender gaps.”
Nick Riley, Corporate Financing Solutions at Standard Bank said, supporting M-KOPA is in line with the bank’s purpose of driving sustainable growth for Africa and its people.
“Financial inclusion not only enables economic growth, it also accelerates it. M-KOPA has, in a short time, managed to positively impact so many lives by enabling access to power and smartphone connectivity, which are a vital part of enabling the economic empowerment of all,” remarked Riley.
Masaki Nakajima, Senior Managing Executive Officer, General Manager, Media & Digital Business Unit at Sumitomo Corporation, said, “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 telecommunications sectors, ultimately enriching the lives of people across Africa.”
M-KOPA’s fintech platform combines the power of digital micropayments with the Internet of Things 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 get instant access to everyday essentials, including smartphones, electric motorcycles, and solar power systems, and then graduate to digital financial services such as loans and health insurance.
M-KOPA’s solution embeds credit into the product through a smart digital connection, giving customers ownership instantly, 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 customer 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 coincides with the business reaching over 3 million customers and providing over $1bn in cumulative credit for underbanked customers in Africa. The company continues to scale rapidly and is on track to acquire an additional million customers over the course of 2023.