M-KOPA raises $250 million to scale consumer fintech across Africa
M-KOPA, a fintech platform, has announced that it successfully secured $250 million in new debt and equity funding to expand its financial services offering to underbanked consumers across sub-Saharan Africa.
This marks one of the largest combined debt and equity raises in the African technology sector, enabling M-KOPA to continue its rapid growth, the company said.
With this new funding, the business aims to expand its smartphone services, expand its model into new markets and expand its funded product set. In line with M-KOPA and its partners’ long-standing commitment to creating a positive impact, debt financing is structured to support sustainability-related goals with pricing linked to the achievement of environmental and social goals.
Lendable, an investment platform was appointed as the loan base and sustainability verification agent for the debt transaction. M-KOPA will also use the funding to drive women’s economic inclusion and reduce greenhouse gas emissions in its East African markets by increasing smartphone ownership among women and further developing its offering of electric mobility solutions.
Speaking at the round, Jesse Moore, CEO and co-founder of M-KOPA, 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 $1 billion in accumulated credit to over 3 million customers, and proud of the thousands of local jobs we’ve created in tough economic times.As we continue to scale, we remain committed to building a sustainable business and closing financial and digital gender gap We are delighted to have the support of new and existing investors who share our vision and mission”.
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Over $200 million in sustainability-related debt financing was led and arranged by Standard Bank Group, Africa’s largest bank, and long-term strategic partner of M-KOPA. Other participating lenders include 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.
An additional $55 million in equity investment was supported by existing strategic investor Sumitomo Corporation, which is contributing $36.5 million to the total increase and will work closely with M-KOPA on new growth markets and products. Blue Haven Initiative, Lightrock, Broadscale Group and Latitude, the sister fund of Local Globe, also participated in the transaction.
M-KOPA’s operations started in East Africa and successfully expanded to Nigeria in 2021 and, more recently, Ghana. From 2020 to 2022, M-KOPA recorded a compound annual growth rate of 85 percent in new customer acquisition and was recently recognized as one of Africa’s fastest growing top 100 companies by the Financial Times for two consecutive years, in 2022 and 2023. Today’s news coincides with the business reaching over 3 million customers and providing over $1 billion in cumulative credit to underbanked customers in Africa. The company continues to scale rapidly and is on track to acquire another million customers by 2023.
“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 telecommunication sectors, ultimately enriching people’s lives across the continent, says Masaki Nakajima, Senior Managing Officer, General Manager, Media & Digital Business Unit at Sumitomo Corporation.