M-KOPA, an asset financing provider and fintech platform, has announced a significant achievement in its fundraising efforts, securing over $250 million in new debt and equity funding.
This substantial amount of capital will be utilized to expand M-KOPA’s financial services offering to underbanked consumers throughout Sub-Saharan Africa, propelling the company’s rapid growth trajectory.
The financing round was a combination of over $200 million in sustainability-linked debt financing, spearheaded and arranged by Standard Bank Group, the largest bank in Africa and a long-term strategic partner of M-KOPA.
Other key lenders involved in the round were 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.
Additionally, $55 million in equity investment was secured from existing strategic investor Sumitomo Corporation, with a contribution of $36.5 million. Sumitomo Corporation will play a vital role in collaborating with M-KOPA to explore new growth markets and develop innovative products. The fundraising round also saw the participation of notable organizations such as Blue Haven Initiative, Lightrock, Broadscale Group, and Latitude.
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M-KOPA’s fintech platform combines digital micropayments and the Internet of Things (IoT) to offer customers access to essential assets.
In regions where individuals have limited financial identities and traditional collateral, M-KOPA’s adaptable credit model empowers them to make a small deposit and immediately gain ownership of everyday necessities like smartphones, electric motorcycles, and solar power systems. This model also facilitates the transition to digital financial services like loans and health insurance.
Through a smart digital connection, credit is seamlessly integrated into the product, enabling customers to gradually repay through micro-instalments. M-KOPA has successfully sold over 3 million of these innovative products through a unique direct sales approach involving a network of over 10,000 agents.
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Having initially established operations in East Africa, M-KOPA expanded to Nigeria in 2021 and more recently to Ghana. From 2020 to 2022, the company achieved an impressive compound annual growth rate of 85% in new customer acquisition.
Its remarkable growth and impact were recognized by the Financial Times, which listed M-KOPA as one of Africa’s Fastest-Growing Top 100 companies in both 2022 and 2023. With the latest funding and its existing customer base of over 3 million, M-KOPA is on track to acquire an additional one million customers throughout 2023.
The new funding will be instrumental in M-KOPA’s plans to enhance its smartphone services, expand its business model to new markets, and broaden its range of financed products. Aligning with the company’s commitment to creating a positive impact, the debt financing structure is designed to support sustainability-linked goals, with pricing tied to the achievement of environmental and social targets.
Lendable has been appointed as the Borrowing Base and Sustainability Verification Agent for the debt transaction. M-KOPA also aims to drive women’s financial inclusion and reduce greenhouse gas emissions in its East African markets. It plans to achieve these objectives by increasing smartphone ownership among women and further developing its electric mobility solutions.
