M-KOPA has successfully secured over $250 million in new debt and equity funding, marking one of the largest combined raises in the African tech sector. 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 notable 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.
In addition to the debt financing, M-KOPA received $55 million in equity investment, with Sumitomo Corporation contributing $36.5 million. Strategic investors Blue Haven Initiative, Lightrock, Broadscale Group, and Latitude, the sister fund to Local Globe, also participated in the transaction.
M-KOPA’s Innovative Fintech Platform
M-KOPA’s fintech platform combines digital micropayments with the Internet of Things (IoT) to provide underbanked individuals with access to productive assets. This innovative solution addresses the challenge of limited financial identities and conventional collateral in many markets. M-KOPA’s flexible credit model allows customers to make a small deposit and gain instant access to essential products such as smartphones, electric motorcycles, and solar power systems. Customers can then graduate to digital financial services, including loans and health insurance. The unique aspect of M-KOPA’s approach is embedding credit into the product through a smart digital connection, providing customers with ownership immediately and enabling them to pay off their purchases through micro-installments over time.
M-KOPA’s Expansion and Growth
M-KOPA initially launched its operations in East Africa and successfully expanded to Nigeria in 2021, followed by Ghana. The company has experienced impressive growth, recording a compound annual growth rate of 85% in new customer acquisition from 2020 to 2022. Its remarkable performance led to its recognition as one of Africa’s Fastest-Growing Top 100 companies by the Financial Times in both 2022 and 2023. With over 3 million customers and providing over $1 billion in cumulative credit for underbanked customers in Africa, M-KOPA is poised to further scale its operations and aims to acquire an additional million customers in 2023.
The recently secured funding will play a crucial role in fueling M-KOPA’s growth and impact in the region. The company plans to expand its smartphone services, introduce its innovative model to new markets, and extend its financed product set. With the infusion of funds, M-KOPA aims to reach more underbanked individuals and provide them with access to essential assets and digital financial services.
One of the key areas of focus for M-KOPA is the growth of its smartphone services. Recognizing the transformative power of smartphones in enabling access to information, communication, and digital services, M-KOPA aims to increase smartphone ownership among its customers. By doing so, the company seeks to bridge the digital divide and empower individuals with the tools they need for economic and personal development.
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Expanding into new markets is another important aspect of M-KOPA’s growth strategy. With its successful expansion into Nigeria and Ghana, M-KOPA has demonstrated its ability to adapt its model to different markets and reach underbanked populations. By entering new markets, M-KOPA can extend its impact and bring its innovative financial services to even more individuals who are currently underserved by traditional banking systems.
Moreover, M-KOPA plans to broaden its range of financed products. The company’s current offerings include smartphones, electric motorcycles, and solar power systems, all of which have proven to be essential assets for individuals in Sub-Saharan Africa. By expanding its product set, M-KOPA can meet the evolving needs of its customers and provide them with access to a wider range of productive assets that can improve their livelihoods and economic prospects.
M-KOPA has always been committed to creating a positive impact on both the environment and society. In line with this commitment, the debt financing secured by the company is structured to support sustainability-linked goals. The pricing of the debt is linked to the achievement of environmental and social targets, ensuring that M-KOPA remains accountable for its impact and actively works towards sustainability.
In addition to environmental goals, M-KOPA aims to drive women’s financial inclusion through its financing solutions. By increasing smartphone ownership among women, the company seeks to empower them economically and bridge the digital gender gap. M-KOPA recognizes the importance of gender equality and the significant impact that women’s financial inclusion can have on overall societal development.
Furthermore, M-KOPA is dedicated to reducing greenhouse gas emissions in its East African markets. The company aims to achieve this by further developing its electric mobility solutions offering. By providing access to electric motorcycles, M-KOPA not only contributes to reducing emissions but also offers a sustainable and cost-effective mode of transportation for individuals in the region.
Jesse Moore, CEO and Co-founder of M-KOPA, envisions a future where digital financial services are accessible to all, regardless of their financial identity or access to collateral. He believes in systematically addressing the barriers to financial inclusion and creating a positive environmental and social impact. Under his leadership, M-KOPA has already made significant strides, unlocking over $1 billion in cumulative credit and providing opportunities to over 3 million customers.
Moore emphasizes the importance of building a sustainable business while closing economic and digital gender gaps. He recognizes the value of partnerships and expresses gratitude for the support of both new and existing investors who share M-KOPA’s vision and mission. By leveraging collective expertise and resources, M-KOPA aims to drive sustainable growth and enrich the lives of people across the continent.
source: Standard Bank
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