M-KOPA, the African-focused fintech platform that provides connected financing and digital financial services, has raised $75 million in equity financing as it seeks to expand into new markets on continent.
With the funding, M-KOPA has set its sights on expansion into additional countries. The fintech currently operates in Kenya, Uganda, Nigeria and recently launched Ghana, and is set for an ambitious plan to further scale its footprint across the continent.
The company says it will also continue expanding its flexible daily and weekly payments model to go beyond asset financing, by scaling its financial services products such as health insurance, cash loans and BNPL merchant partnerships that have proven to be popular with customers.
Launched in 2011, M-KOPA’s financing platform enables underbanked customers to access a broad range of products and services without 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.”
Dave Easton, Partner in Generation Investment Management’s Growth Equity team said M-KOPA plays aan important role in boosting ownership of digital and financial tool.
“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,”Mr Easton said.
“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.”
In Sub-Saharan Africa, 85 per cent of the population live on less than $5.50 daily per adult, and as a result, cannot afford to make major purchases outright without credit. However, access to credit remains severely limited across the continent, as the majority of consumers are underbanked, offline and hard-to-reach.
M-KOPA’s offering costs an average monthly interest rate of 3.1per cent, lower than the typical interest rates offered by alternative sources of credit their customer base can access. Through this, M-KOPA is powering financial and digital inclusion by making micropayments accessible and leveraging data to unlock credit solutions.
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 noted that “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”.
He added: “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”.
As a result of its rapid scaling, M-KOPA has created over 500 new full-time jobs across Africa since 2019 and is currently recruiting for commercial operations & engineering roles globally as part of its expansion plan.
Buoyed by the success of pioneer peers, more off-grid solar power start-ups are pouring into Kenya’s rural areas offering pay-as-you-go kits in a race to claim customers who lack reliable access to electricity. Venture capital funds have consequently been stepping up their investments in the clean and renewable energy space in Kenya. This has coincided with the growth of the Kenyan solar kits market which has attracted multinationals like Indian firm Orb Energy and Germany-based Mobisol. The main challenge facing smaller companies, however, is how to raise enough capital to supply the expensive solar kits in return for small upfront payments from customers. Solar experts reckon that Kenya, like most African countries, has a high potential for solar energy generation given high radiation levels from the sun throughout the year.
Afcacia seeks to be a powerful tech mouthpiece, giving a voice to your products and services in a way that has never seen before.