M-KOPA, a fintech platform that provides connected financing and digital financial services to underbanked consumers in four African markets, announced a $75 million growth equity round today.
Generation Investment Management and Broadscale Group led the round, with participation from new investors such as Local Globe’s Latitude Fund and HEPCO Capital Management. The round was also attended by M-existing KOPA’s investors, CDC Group and LGT Lightrock. M-total KOPA’s equity funding now stands at $190 million. Today’s news comes on the heels of M-KOPA providing financing to two million customers.
M-KOPA intends to use the funds to expand into new countries, adding to its hubs in Kenya, Uganda, Nigeria, and the recently launched Ghana, in order to further expand its footprint across the continent. In addition, the company will continue to expand its flexible daily and weekly payment model to go beyond asset financing by scaling its popular financial services products such as health insurance, cash loans, and BNPL merchant partnerships.
M-financing KOPA’s platform, which was launched in 2011, allows underbanked customers to access a wide range of products and services without the need for collateral or a guarantor. Customers are able to build ownership of their assets as well as credit histories over time through a flexible payment model by combining the power of digital micropayments with Internet-of-Things [IoT] technology to make financing more accessible.
M-KOPA has so far secured over $600 million in financing and provided 2 million customers with access to a diverse range of products such as smartphones, solar lighting, solar-powered appliances, and digital financial services such as cash loans and health insurance. M-KOPA has nearly 2.5X increased in new customers in 2021 and is expected to reach 3 million customers by the end of the year.
Jesse Moore, M-KOPA CEO and Co-founder, commented on the round, saying, “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.” Because of our innovative model, we have already enabled financial empowerment for over two million people through micropayments, but there are still millions of people across the continent who have limited economic options. With this funding, we will expand to more African markets and reach over 10 million customers in the coming years.”
“M-unique KOPA’s technology-enabled approach to providing essential consumer goods and financial services is an inspiring engine of empowerment that is perfectly aligned with our mission of Disruption for Good,” said Andrew Shapiro, Managing Partner at Broadscale. “The company’s rapid customer growth demonstrates the massive unmet demand in this sector, and we look forward to collaborating with M-KOPA as they expand their reach and impact across Africa.”
“We believe M-KOPA is an important part of the effort to accelerate access to digital and financial tools that will empower millions of people across Africa while also increasing access to clean energy, clean mobility, and connectivity.” We were early supporters of M-KOPA and continue to be impressed by its product offerings’ ongoing innovation and ability to scale on a large scale. “We are delighted to continue assisting M-KOPA as it expands,” said Dave Easton, Partner in Generation Investment Management’s Growth Equity team.
In Sub-Saharan Africa, 85 percent of adults live on less than $5.50 per day, and as a result, they cannot afford to make large purchases outright without credit.
Access to credit, however, remains severely limited across the continent, as the majority of consumers are underbanked, offline, and difficult to reach. M-offering KOPA’s has an average monthly interest rate of 3.1 percent, which is lower than the typical interest rates offered by alternative credit sources to their customer base. M-KOPA is enabling financial and digital inclusion by enabling micropayments and leveraging data to unlock credit solutions. The company was recently named one of Fortune Magazine’s Impact 20, which recognizes the top 20 global venture and private-equity-backed companies that address critical social and environmental issues as part of their business model.
Mayur Patel, M-Chief KOPA’s Commercial Officer, added, “Over the last decade, we’ve seen extraordinary growth across our markets in East Africa and our recently launched operations in Nigeria and Ghana by leveraging our unique data and market knowledge in serving customers.” There is a huge opportunity for us to make everyday necessities 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 growth since 2019 and is currently recruiting for commercial operations and engineering roles globally as part of its expansion plan.