M-Kopa Holdings, a fintech platform based in Kenya, has secured a $65 million investment from the International Finance Corporation (IFC).
The funding will be used to expand M-Kopa’s financial services to under-banked consumers in Africa, with the aim of making capital assets more accessible to customers.
The IFC has allocated a total of $2.9 billion in long-term and short-term financing to businesses in Kenya, Tanzania, and the Democratic Republic of Congo (DRC). This funding will help these businesses increase access to finance for small and medium-sized enterprises (SMEs), boost energy access, and promote gender inclusion.
Mary Porter Peschka, the IFC Regional Director for Eastern Africa, stated that the IFC has increased its investments in Eastern Africa by 61% in the last financial year.
The financing provided by the IFC will support their partners in increasing lending to small businesses, expanding access to green and sustainable electricity, and driving greater gender inclusion.
The IFC aims to further expand its work across Eastern Africa in support of the region’s development agenda and the private sector’s role in building a more inclusive and environmentally friendly future.
In addition to M-Kopa, the IFC has also provided a $150 million loan to KCB Group Kenya to help local businesses address the effects of climate change through the development of energy efficiency projects, renewable energy initiatives, climate-smart projects, and green buildings.
M-Kopa plans to utilize the funds to increase access to capital assets such as solar home systems, smartphones, and e-bikes, making them more accessible to customers.
This latest investment follows M-Kopa’s successful fundraising efforts in March 2022, where the company raised $75 million in a growth equity round.
The funding came from investors such as Generation Investment Management, Broadscale Group, LocalGlobe’s Latitude Fund, and HEPCO Capital Management. Existing investors CDC Group and LGT Lightrock also participated in the round.
In May 2023, M-Kopa closed over $250 million in new debt and equity funding, marking one of the largest combined debt and equity raises in the African tech sector.
The funding will enable M-Kopa to expand its financial services to underbanked consumers across Sub-Saharan Africa. Standard Bank Group, Africa’s largest bank and a long-term strategic partner to M-Kopa, led and arranged over $200 million in sustainability-linked debt financing.
Other participating lenders include the IFC, Lion’s Head Global Partners, FMO: Dutch Entrepreneurial Development Bank, British International Investment, Mirova SunFunder, and Nithio.
Sumitomo Corporation, an existing strategic investor, contributed $36.5 million in equity investment, with participation from Blue Haven Initiative, Lightrock, Broadscale Group, and Latitude.
M-Kopa’s fintech platform combines digital micropayments with the Internet of Things (IoT) to provide customers with access to productive assets.
The company’s flexible credit model allows individuals to pay a small deposit and gain instant access to essential items like smartphones, electric motorcycles, and solar power systems.
Customers can then pay off their purchases through micro-instalments over time. M-Kopa has sold over 3 million of these products through a unique direct sales model involving more than 10,000 agents.
Initially operating in East Africa, M-Kopa expanded to Nigeria in 2021 and more recently to Ghana. The company has experienced rapid growth, with a compound annual growth rate of 85% in new customer acquisition from 2020 to 2022.
M-Kopa was recognized as one of Africa’s Fastest-Growing Top 100 companies by the Financial Times in 2022 and 2023. The recent funding announcement coincides with M-Kopa reaching over 3 million customers and providing over $1 billion in cumulative credit to underbanked customers in Africa. The company aims to acquire an additional million customers in 2023.
Jesse Moore, CEO and Co-founder of M-Kopa, expressed the company’s commitment to creating a positive environmental and social impact by addressing barriers to digital financial services.
M-Kopa has already unlocked $1 billion in credit for over 3 million customers and has created thousands of local jobs. As the company continues to expand its reach, it aims to make a meaningful contribution to sustainable development in Africa.