M-KOPA, African fintech platform, locks in $75m in growth round
March 1, 2022856 views0 comments
BY: CHARLES ABUEDE
Africa’s fintech platform, M-KOPA, has locked in another $75 million in its funding growth round that will enable it achieve its expansion plans, as well as add to its hubs in Kenya, Uganda, Nigeria, including its recent entrance into Ghana to further scale its footprint across the continent.
The newly capital injection brings the startups’ total equity funding to $109 million.
The growth round was led by Generation Investment Management and Broadscale Group with participation from new investors, including LocalGlobe’s Latitude Fund and HEPCO Capital Management. M-KOPA’s existing investors, CDC Group and LGT Lightrock also participated in the round and the new equity fund will help M-KOPA provide financing to its over two million customers across the continent.
Read Also:
- TRUST FROM WITHIN: Need for African credit ratings agency
- Flutterwave CEO appointed to Smithsonian's African art advisory board
- Nigerian airlines not among African carriers with world’s 3 major alliances
- 78% African youth identify climate change an existential threat to existence
- Focus for the week: TOTAL NIGERIA PLC 9M’24 Earnings Release: Higher…
The fintech platform, launched in 2011 by Jesse Moore, has enabled the underbanked customers to access a broad range of products and services without collateral or a guarantor through the combination of 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.
In the sub-Saharan African region, it is estimated that about 85 percent of the population lives on below $5.50 per day per adult which has resulted in the non-affordability of major assets outrightly without credit. However, access to credit remains severely limited across the continent, as the majority of consumers are underbanked, offline and hard-to-reach.
But M-KOPA said, to date, it has unlocked over $600 million in financing and enabled two 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, while it recorded nearly 2.5 times growth in new customers in 2021 and is projected to reach three million customers by the end of 2022.
The company’s offering costs an average monthly interest rate of 3.1 percent, lower than the typical interest rates offered by alternative sources of credit their customer base can access.
Jesse Moore, M-KOPA chief executive officer and co-founder, speaking on the new equity round, 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.”
Mayur Patel, M-KOPA’s chief commercial officer, added 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. 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.”
Furthermore, Andrew Shapiro, in his comments said, “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. 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, a 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.”
M-KOPA also said it has created over 500 new full-time jobs across Africa since 2019 as a result of its rapid scaling.