M-KOPA, a fintech platform that connects underbanked customers to connected financing and digital financial services in four African markets, has raised $75 million in a growth equity round.
Generation Investment Management and Broadscale Group led the round, with new investors such as LocalGlobe’s Latitude Fund and HEPCO Capital Management joining in. CDC Group and LGT Lightrock, two of M-current KOPA’s investors, also participated in the round.
M-KOPA’s total equity funding has already hit $190 million. M-KOPA is also giving loans to two million customers, according to today’s report.
M-KOPA intends to use the funds to grow into additional countries, adding on its existing centers in Kenya, Uganda, Nigeria, and Ghana, as well as expanding its footprint across the continent.
By scaling its financial services offerings such as health insurance, cash loans, and BNPL merchant partnerships, the business will continue to expand its flexible daily and weekly payments model to go beyond asset finance.
M-KOPA’s financing platform, which was launched in 2011, allows underbanked customers to access a broad range of products and services without the need for collateral or a guarantor.
By combining the power of digital micropayments with the Internet-of-Things [IoT] technology to make financing more accessible, customers are enabled to build ownership of their assets as well as build their credit histories over time through a flexible payment model.
To date, M-KOPA has unlocked over $600 million in financing and enabled 2 million customers to access a diverse set of products including smartphones, solar lighting, solar-powered appliances and digital financial services such as cash loans and health insurance.
M-KOPA has recorded nearly 2.5X growth of new customers in 2021 and is projected to reach 3 million customers by the end of 2022.
Speaking on the round, Jesse Moore, M-KOPA CEO and Co-founder said, “We’re thrilled to partner with leading global investors with deep experience supporting growth-stage companies as we expand our platform to serve more of our customers’ needs. ”
“Our innovative model means we have enabled financial empowerment for over two million people already through micro-payments, but there are still millions of people across the continent that are stuck with limited economic options. ”
With this funding, we will expand to more markets across Africa and scale to over 10 million customers in the next few years.”
“M-KOPA’s unique technology-enabled approach to providing essential consumer goods and financial services is an inspiring engine of empowerment perfectly aligned with our mission of Disruption for Good,” said Broadscale’s Managing Partner, Andrew Shapiro.
“The company’s rapid customer growth demonstrates the massive unmet demand in this sector, and we look forward to working with M-KOPA as they continue to scale their reach and impact across Africa”
“We believe M-KOPA is a critical part of the push to accelerate access to digital and financial tools that will empower millions of people across Africa whilst increasing access to clean energy, clean mobility and connectivity. ”
We were early supporters of M-KOPA and continue to be impressed by the continued innovation of its product offerings and ability to accelerate at a significant scale. We are pleased to continue supporting M-KOPA as it scales further”, said Dave Easton, Partner in Generation Investment Management’s Growth Equity team.
In Sub-Saharan Africa, 85 percent of the population live on less than $5.50 a day per adult, and as a result, they are unable to make major purchases without taking out a loan.
However, because the bulk of customers are underbanked, offline, and difficult to contact, access to credit remains severely limited across the continent.
M-KOPA’s offering has a monthly interest rate of 3.1 percent, which is lower than the typical interest rates offered by alternative sources of credit available to their consumer base.
By making micropayments available and leveraging data to unlock credit solutions, M-KOPA is enabling financial and digital inclusion.
The company was recently recognised as one of Fortune Magazine’s Impact 20, which highlights the top 20 global venture and private-equity backed companies tackling key social and environmental issues as part of their business model.
Mayur Patel, M-KOPA’s Chief Commercial Officer, added, “By leveraging our unique data and market knowledge in serving customers over the last decade at M-KOPA, we’ve seen extraordinary growth across our markets in East Africa and our recently launched operations in Nigeria and Ghana. ”
“There is a massive opportunity in front of us to make everyday essentials more accessible by better matching fractional payment terms with customers’ daily or weekly earning and spending cycles.”
M-KOPA has created over 500 new full-time jobs across Africa as a result of its rapid expansion, and is currently recruiting for commercial operations and engineering roles globally as part of its expansion plan.