M-KOPA – a connected asset financing platform that offers millions of underbanked customers access to life-enhancing products and services has raised the sum of $75 million to enable it double its mission to serving the unbanked population in selected African markets to access a broad range of its products and services without collateral.
As a result of the growth equity round, it represents the fifth funding gained by the company which has raised the total equity raised to $190 million. The company also, has raised similar rounds of debt as well.
Leading the round was Generation Investment Management and Broadscale Group and it also saw participation from its previous investors such as CDC Group and LGT Lightrock as well as LocalGlobe’s Latitude Fund and HEPCO Capital Management.
M-KOPA operations is a pay-as-you-go (PAYG) financial model that allows its customers build ownership of appliances overtime after an initial deposit followed by flexible micro-payments.
With its commenced operations in 2012, its market base is currently in Nigeria, Kenya, Ghana and Uganda – this has summed up its customers to 2 million customers across the four African markets.
The company started with solar power home system targeted at low-income earners without electricity in Kenya, Tanzania and Uganda but has expanded its model with time to include smartphones, TVs, refrigerators, solar lighting and digital financial services such as cash loans and health insurance.
In 2019, according to reports by the world economic forum, the pay-as-you-go option is regarded as a model to tackling the challenges in the electricity sector.
Jesse Moore, co-founder and CEO stated that its model is very inclusive in terms of who can qualify unlike the traditional credit instruments which have a number of restrictions in terms of screening, collateral or a guarantor, thus limiting people when it comes to financial inclusion.
“M-KOPA’s model welcomes everybody. There’s no upfront scoring; if you can pay the upfront deposit, that’s all we require. And then you’re into a relationship where consumers can get the solar system or smartphones which irrespective of the market, whether you’re in Lagos or semi-urban Nairobi, can immediately put those to enhance their businesses”, Moore said.
Mayor Patel, COO, M-KOPA added, “We are enabling customers who otherwise could not have been able to access that kind of support, to then plough that back into productive assets that are helping them generate more income in their lives”.
“When we go back to our customers, which we do regularly, and ask them how they use the products or services, over 30% of them report back to us saying they use this to kind of generate additional income and support their livelihoods.”