Kenyan fintech M-Kopa raises over Ksh.34 billion in debt and equity

Kenyan asset financing start-up M-Kopa announced Monday it had closed over Ksh.34 billion ($250 million) in new debt and equity funding.

Founded by Nick Hughes, Chad Larson and Jesse Moore, the company has been providing underbanked customers in Africa with products such as solar lighting systems, televisions, fridges, smartphones and financial services since 2012.

The capital includes Ksh.7.5 billion ($55 million) in equity and over Ksh.27 billion ($200 million) in debt.

M-Kopa said the money will enable it 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 tech sector, enabling us to continue to scale our rapid growth as well as further our mission of improving financial and digital inclusion in the region,” the venture said.

The Standard Bank Group led and arranged over Ksh.27 billion ($200 million) in sustainability-linked debt financing, while the International Finance Corporation, funds managed by Lion's Head Global Partners, FMO - Dutch entrepreneurial development bank, British International Investment, Mirova, and Nithio participated in the debt round.

M-Kopa’s product uses an Internet-of-Things (IoT) approach to combine digital micropayments, giving its customers – who mostly have limited pre-existing financial identities and conventional collateral – access to “productive assets” instantly.

Its credit model allows individuals to pay a small deposit and get instant access to everyday products such as electronics, before upgrading to digital financial services such as loans and health insurance.

With a network of over 10,000 agents, M-Kopa says it has sold over 3 million of these products through a unique direct sales model that includes more than 10,000 agents.

The start-up began operations in East Africa before spreading to Nigeria in 2021 and most recently Ghana.

In March last year, M-Kopa announced it had acquired Ksh.10.2 billion ($75 million) in equity, bringing the total equity the fintech has raised since its launch to Ksh.33.6 ($245 million).

The company says it has additionally received over Ksh.22 billion from investors in over 16 rounds within the same time.