M-KOPA, a connected asset financing platform that offers underbanked customers access to life-enhancing products and services has raised $75 million to double down on its mission to enable underbanked customers in selected African markets to access a broad range of products and services without collateral.
According to the company, the growth equity round which represents its fifth funding – making its total equity raise to stand at $190 million – will be used to expand into additional countries to scale its footprint across the continent.
The funding round which was led by Generation Investment Management and Broadscale Group also saw participation from previous backers such as the CDC Group and LGT Lightrock as well as LocalGlobe’s Latitude Fund and HEPCO Capital Management.
What they are saying
Jesse Moore, co-founder and CEO noted that its model is very inclusive in terms of who can qualify unlike the traditional credit instruments which have a number of restrictions in terms of screening, collateral or a guarantor, thus limiting people when it comes to financial inclusion.
“M-KOPA’s model welcomes everybody. There’s no upfront scoring; if you can pay the upfront deposit, that’s all we require. And then you’re into a relationship where consumers can get the solar system or smartphones which irrespective of the market, whether you’re in Lagos or semi-urban Nairobi, can immediately put those to enhance their businesses.”
Mayor Patel, Chief Commercial Officer, M-KOPA said, “We are enabling customers who otherwise could not have been able to access that kind of support, to then plough that back into productive assets that are helping them generate more income in their lives.
“When we go back to our customers, which we do regularly, and ask them how they use the products or services, over 30% of them report back to us saying they use this to kind of generate additional income and support their livelihoods.”
Dave Easton, Partner in Generation Investment Management’s Growth Equity team said, “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.”
What you should know
- M-KOPA operates a pay-as-you-go (PAYG) financing model that allows customers to build ownership of appliances over time after an initial deposit followed by flexible micro-payments.
- The company, which was launched in 2011 said it has clocked 2 million customers across the four African market, Kenya, Uganda, Nigeria and Ghana where it is currently based.
- The company started with solar power home system targeted at low-income earners without electricity in Kenya, Tanzania and Uganda but has expanded its model with time to include smartphones, TVs, refrigerators, solar lighting and digital financial services such as cash loans and health insurance.