M-KOPA has successfully closed over $250 million in new debt and equity funding.

Fintech platform M-KOPA today announced it has successfully closed over $250 million in new debt and equity funding to expand its operations across Sub-Saharan Africa.

This, it says, marks one of the largest combined debt and equity raises in the African tech sector, enabling M-KOPA to continue its growth path.

Founded in 2011, M-KOPA provides digital financial services to underbanked consumers by leveraging data to combine digital micropayments with Internet of Things technology.

M-KOPA’s financial model allows individuals to pay a small deposit and get instant access to everyday essentials, including smartphones, electric motorcycles and solar power systems.

With operations in Kenya, Uganda, Nigeria and Ghana, M-KOPA’s platform has provided over $1 billion in credit to date, and enabled 3 million customers to access smartphones, solar power systems, digital loans and health insurance.

The company directly employs nearly 2 000 people across Africa and has created over 10 000 roles for sales agents since the start of 2020.

Today, it announced over $200 million in sustainability-linked debt financing was led and arranged by Standard Bank Group, Africa’s largest bank and a long-term strategic partner to M-KOPA.

Other participating lenders include The International Finance Corporation, funds will be managed by a group of companies namely Lion's Head Global Partners, FMO: Dutch Entrepreneurial Development Bank, British International Investment, Mirova SunFunder and Nithio. 

A further $55 million in equity investment was backed by existing investor Sumitomo Corporation, which is contributing $36.5 million to the total raise and will engage closely with M-KOPA on new growth markets and products.

Blue Haven Initiative, Lightrock, Broadscale Groupand Latitude – the sister fund to Local Globe – also participated in the transaction.

With this new funding, the business aims to grow its smartphone services, expand its model to new markets and extend its financed product set.

M-KOPA will also use the financing to drive women’s financial inclusion and reduce greenhouse gas emissions in its East African markets, by increasing smartphone ownership among women and further developing its electric mobility solutions offering, respectively.

Jesse Moore, M-KOPA CEO and co-founder, comments: “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 billionn in cumulative credit to over three million customers and are proud of the thousands of local jobs we’ve created during tough economic times.

“As we continue to scale, we remain committed to building a sustainable business and closing economic and digital gender gaps. We are delighted to have the support of new and existing investors who share our vision and mission.”

Nick Riley, corporate financing solutions, Standard Bank, says supporting M-KOPA is in line with the bank’s purpose of driving ‘sustainable growth for Africa and her people’.

He says: “Financial inclusion not only enables economic growth, it also accelerates it. M-KOPA has, in a short time, managed to positively impact so many lives by enabling access to power and smartphone connectivity, which are a vital part of enabling the economic empowerment of all.”

Masaki Nakajima, senior managing executive officer, Sumitomo Corporation says: “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 telecommunications sectors, ultimately enriching the lives of people across the continent.”