M-KOPA, a prominent fintech platform, has closed a funding round exceeding $250 million in debt and equity.
This significant financial boost will enable M-KOPA to expand its range of financial services for underbanked consumers across Sub-Saharan Africa, further solidifying its position as a leader in the industry.
The fundraising achievement represents one of the largest combined debt and equity raises in Africa’s tech sector, empowering M-KOPA to sustain its rapid growth.
Standard Bank Group, Africa’s largest bank and a longstanding strategic partner of M-KOPA, led and organized over $200 million in sustainability-linked debt financing. Notable participants in the funding round include The International Finance Corporation (IFC), Lion’s Head Global Partners-managed funds, FMO: Dutch Entrepreneurial Development Bank, British International Investment, Mirova SunFunder, and Nithio.
Additionally, $55 million in equity investment was secured, with Sumitomo Corporation, an existing strategic investor, contributing $36.5 million to the total raised amount. Sumitomo Corporation will collaborate closely with M-KOPA to explore new growth markets and develop innovative products. Other participants in the funding round include Blue Haven Initiative, Lightrock, Broadscale Group, and Latitude, the sister fund of Local Globe.
M-KOPA has revolutionized the fintech landscape by combining digital micropayments with the Internet-of-Things (IoT) technology. Their innovative platform enables customers, particularly those with limited financial identities and traditional collateral, to gain access to essential assets.
Through M-KOPA’s flexible credit model, individuals can make a small deposit and instantly acquire everyday essentials such as smartphones, electric motorcycles, and solar power systems. They can then graduate to digital financial services like loans and health insurance.
M-KOPA embeds credit into the product through a smart digital connection, allowing customers to own the products immediately and pay them off through micro-instalments over time. The company has successfully sold over 3 million of these products through a unique direct sales model involving more than 10,000 agents.
Starting in East Africa, M-KOPA expanded its operations to Nigeria in 2021 and more recently to Ghana. Between 2020 and 2022, the company achieved an impressive compound annual growth rate of 85% in new customer acquisition.
It was also recognized as one of Africa’s Fastest-Growing Top 100 companies by the Financial Times in both 2022 and 2023. Today’s announcement coincides with M-KOPA surpassing 3 million customers and providing over $1 billion in cumulative credit to underbanked customers in Africa. The company continues to scale rapidly and aims to acquire an additional million customers in 2023.
With the newly secured funding, M-KOPA plans to expand its smartphone services, enter new markets, and diversify its range of financed products. As part of its commitment to creating a positive impact, the debt financing is structured to support sustainability-linked goals.
The pricing of the debt is 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 will also utilize the funding to drive women’s financial inclusion and reduce greenhouse gas emissions in East African markets. This includes promoting smartphone ownership among women and further developing electric mobility solutions.
Speaking on the round, Jesse Moore, M-KOPA CEO and Co-founder 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 $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”.
“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. 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.” 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 telecommunications sectors, ultimately enriching the lives of people across the continent.” commented Masaki Nakajima, Senior Managing Executive Officer, General Manager, Media & Digital Business Unit at Sumitomo Corporation.
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