In a historic milestone for Kenyan startups, M-Kopa, the solar energy and asset financing firm, has successfully raised a staggering $255 million in a mix of debt and equity. This funding round, one of the largest for the region, is led by Standard Bank and also includes significant investment from Japan’s Sumitomo Corporation among others. This financial boost will primarily fuel M-Kopa’s ambitious growth plans across sub-Saharan Africa.
Monday’s announcement detailed that of the total investment, $200 million is in the form of debt, with the remaining $55 million coming as equity. This financial inflow marks the most substantial single-round capital raised by a startup in Kenya, highlighting the burgeoning fintech scene in the country.
Established in 2011, M-Kopa has leveraged innovative financial technology to empower underbanked customers by offering a wide array of products and services. Without the need for collateral or a guarantor, their flexible payment model has been a game-changer in the region.
Jesse Moore, CEO and Co-Founder of M-Kopa, expressed his excitement and gratitude for the support received from both new and existing investors. “As we continue our growth trajectory, we remain unwaveringly committed to creating a sustainable business model and bridging economic and digital gender disparities,” Moore said.
Standard Bank, a key player in this funding round, provided $200 million in sustainability-linked debt financing. On the equity side, Sumitomo Corporation contributed $36.5 million. Other participants in this fund-raising effort included UK-based investment firm Lightrock.
M-Kopa, in its relatively short existence, has been instrumental in transforming lives through access to power and smartphone connectivity, seen as key enablers for economic empowerment. “The economic uplift that M-Kopa has facilitated is truly remarkable,” observed Nick Riley, manager of Standard Bank Corporate Financing Solutions.
The company currently operates in Kenya and has broadened its footprint to include Uganda, Nigeria, and Ghana. M-Kopa’s reach is evident, with over 3 million customers in the region having accessed about $1 billion in credit to purchase a variety of items from smartphones and solar power systems to health insurance.
This new investment follows M-Kopa’s impressive fundraising record, which includes $75 million raised in March of last year. Since its inception, the startup has amassed over $200 million in over 16 rounds, primarily to bolster its asset finance business, which enables customers to purchase green energy products on an installment basis.
The success of M-Kopa has not gone unnoticed, as more off-grid solar power startups are flocking to rural Kenya, offering pay-as-you-go kits in an effort to capture the market of customers who lack reliable access to electricity. M-Kopa’s growing list of competitors includes notable names such as Solar Panda, D.Light, Greenlight Planet, and Aspira among others. Despite the rising competition, M-Kopa’s latest funding round suggests that it remains a formidable leader in the region’s fintech space.