M-KOPA, the fintech platform that provides connected financing and digital financial services to underbanked consumers across four markets in Africa, has announced its $75 million Growth Equity round, to expand into more countries.
The round which was led by Generation Investment Management and Broadscale Group, with participation from new investors including LocalGlobe’s Latitude Fund and HEPCO Capital Management, will be used to add more hubs in Kenya, Uganda, Nigeria, and Ghana where it recently got launched.
“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,” Jesse Moore, M-KOPA CEO and Co-founder said.
This capital injection brings M-KOPA’s total equity funding to $190 million. The company will also continue expanding its flexible daily and weekly payments model to go beyond asset financing, by scaling its financial services products such as health insurance, cash loans, and buy-now-pay-later (BNPL) merchant partnerships that have proven to be popular with customers.
The company also announced that it has hit the two million customer milestone. Launched in 2011, M-KOPA’s financing platform enables underbanked customers to access a broad range of products and services without collateral or a guarantor.
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By combining 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.
To date, M-KOPA 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.
“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,” Andrew Shapiro, Broadscale’s Managing Partner, said.
In Sub-Saharan Africa, 85 percent of the population live on less than $5.50 per day per adult, and as a result, cannot afford to major purchases outright without credit.
However, access to credit remains severely limited across the continent, as the majority of consumers are underbanked, offline and hard-to-reach. M-KOPA’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.
Through this, the company says it is powering financial and digital inclusion by making micropayments accessible and leveraging data to unlock credit solutions. The company was recently recognised as one of Fortune Magazine’s Impact 20, which highlights the top 20 global venture and private-equity backed companies tackling key social and environmental issues as part of their business model.
As a result of its scaling, M-KOPA has created over 500 new full-time jobs across Africa since 2019 and is currently recruiting for commercial operations and engineering roles globally as part of its expansion plan.
