M–KOPA, a fintech platform, has announced that it closed $250m in new debt and equity funding 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 and coincides with the business reaching over 3 million customers and providing over $1 billion in cumulative financing for underbanked customers in Africa.
Over $200m in sustainability-linked debt financing was led and arranged by Standard Bank Group, Africa’s largest bank and long-term strategic partner to M–KOPA. Other participating lenders include The International Finance Corporation (IFC), funds managed by Lion’s Head Global Partners, FMO: Dutch Entrepreneurial Development Bank, British International Investment, Mirova SunFunder and Nithio. A further $55m in equity investment was backed by existing strategic investor Sumitomo Corporation, which is contributing $36.5m to the total raise and will engage closely with M–KOPA on new growth markets and products. Blue Haven Initiative, Lightrock, Broadscale Group and Latitude, the sister fund to Local Globe, also participated in the transaction.
African-connected asset financing platform that caters to underbanked customers in Africa, M-KOPA, has secured a $250 million fund to expand offerings across sub-Saharan Africa.
The funding round was led by Standard Bank Group, Africa’s largest bank, and long-term partner to M-KOPA, as well as investments from other investors which include Mirova SunFunder and Nithio, The International Finance Corporation (IFC), funds managed by Lion’s head global partners, British International investment, and several others.
With the recent fund raised, the startup aims to grow its smartphone services, expand its product offerings into new markets and extend its financed product set.
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Speaking on the fund raised, M-KOPA CEO and founder Jesse Moore said, “At M-KOPA, we are working hard to create a positive environment and social impact by systematically addressing the barriers to digital financial services. We have already unlocked $1bn in cumulative credit to over 3 million customers and are proud of the thousands of local jobs we have 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”.
Also speaking on the equity Fund raised, M-KOPA’s long-term strategic investor, Standard Bank said, “Supporting M-KOPA is in line with our purpose of driving sustainable growth for Africa and her people. 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.”
Launched commercially in 2012 with its headquarters in Nairobi, M-KOPA business revolves around using debt to finance customers’ purchase of products and services it sells, such as smartphones and solar power systems, as well as loans and health insurance across its four markets, (Uganda, Nigeria, Ghana, and Kenya). With a flexible credit model, the startup allows individuals to pay a small deposit for the two products above-mentioned, enabling them to pay off through micro-installments and helping build their credit history over time.
M-Kopa is supported by several partners, as mobile network operators like Safaricom have partnered with the startup to support mobile money and value-added services. In 2015, M-Kopa was recognized by Fortune Magazine as one of the Top 50 Companies Changing the World and won the Zayed Future Energy Award 2015.
From 2020-2022, M-KOPA has recorded a compound annual growth rate of 85% in new customer acquisition, reaching over 3 million customers and providing over $1 billion in cumulative credit for under banked customers in Africa.