M-KOPA raises $75 million as it’s subscribers reaches 2 million in four African countries.

According to a report  published by the World Bank in 2019, 85 percent of Africans live on less than $5.50 per day. A considerable portion of these adults are unbanked or underbanked, which means they lack access to credit and are unable to make major purchases outright. Since its inception as an energy provider in 2011, M-financing KOPA’s platform has shown to be beneficial to this group of users. The company, which provides underbanked customers in certain African regions with access to a wide range of products and services without the need for collateral or a guarantor, said today that it has received $75 million.

M- KOPA’s equity round is referred to as the “growing equity round” in their press release (it has raised similar rounds of debt, too). M-KOPA has raised $190 million in total equity. This round included previous investors such as the CDC Group and LGT Lightrock, as well as LocalGlobe’s Latitude Fund and HEPCO Capital Management. The growth equity deal was led by Generation Investment Management and Broadscale Group.

Jesse Moore, the company’s co-founder and CEO, is in charge. M-KOPA is best recognized for its pay-as-you-go (PAYG) financing strategy, which allows customers to build appliance ownership over time by paying an initial deposit and then making flexible micro-payments.

M-KOPA began with solar-powered home systems aimed at low-income and rural consumers in Kenya, Tanzania, and Uganda who lacked access to electricity. It has, however, expanded its pay-as-you-go model to cover additional necessities, including as cellphones (which were first introduced in Kenya two years ago), televisions, freezers, solar lighting, and digital financial services such as cash loans and health insurance. The geographical scope of the organization has also shifted. M-KOPA was largely focused on East Africa six years ago, but after pulling out of Tanzania, it is now present in Kenya, Uganda, Nigeria, and Ghana.

Customers can access the complete range of M-offerings KOPA’s in the company’s more established markets, Kenya and Uganda. Customers in the company’s other two newer areas, however, are currently only eligible for smartphone financing, according to the company’s officials. The simple answer is that consumers prefer smartphones to solar panels, as evidenced by M-sales KOPA’s figures as of July last year, which showed that in just 18 months, the company had sold 500,000 smartphones, less than half of what solar panels had sold in ten years.

“When we first enter a new market, we start with just one offering, which is our smartphone financing.” “We clearly have a broader array of products in our more mature markets,” M-KOPA COO Mayur Patel explained, “but to enable a rapid scale-up and to assist early execution in a new market, we start only with the device financing.”


M-KOPA has gained over 50,000 clients in Nigeria since its introduction, according to the company’s officials. They claim that Ghana, the company’s newest market, “has grown two times as rapidly as any of its previous markets.” M-KOPA expects to launch in one new market this year and in 2023 as part of its growth ambitions, which are based on this recent funding. The ten-year-old business hopes to expand its offerings in Nigeria in the second half of this year and in Ghana in the first quarter of 2023.  The platform matches fractional payment periods with customers’ daily or weekly earning and spending cycles to deliver finance and digital financial services to underbanked consumers in four geographies.  Its customers span from ride-hailing drivers to small-business owners who manage their firms using cellphones. However, in a market where a large percentage of adults make less than $5 per day, a $100 smartphone is a luxury.

These customers can receive the smartphone by paying a down payment or a nominal deposit of $30 through M-KOPA. Consumers’ earnings vary based on the type of business they run, but they are all expected to pay between 30 cents and $1 (or its equivalent across all markets) daily to cover the remaining costs, with an average monthly interest rate of 3.1 percent.


“Another thing to keep in mind regarding our methodology is that it is fairly inclusive in terms of who qualifies.” As you may be aware, most credit instruments have a variety of constraints in terms of screening, collateral, or a guarantor, and this is the limiting factor for so many individuals when it comes to financial inclusion,” Moore, the CEO, explained.

Everyone is welcome in this model. There is no upfront scoring; all we ask is that you pay the upfront deposit. Then you’re in a relationship where consumers can purchase solar panels or cellphones that they can use right away to improve their enterprises, regardless of the market, whether it’s Lagos or semi-urban Nairobi.”

M-company KOPA’s was boosted by the pandemic, which, combined with a shift in strategy that included introducing smartphone finance, resulted in a massive increase in client base and recruiting.

While it took M-KOPA eight years to get its first million users, it only took 18 months to reach its second million, which it recently surpassed. According to CEO Moore, the company’s customer base is expected to exceed 3 million in the following few years. M-KOPA claims to have added over 500 full-time roles throughout its four markets in the last two years, creating thousands of “income-earning jobs.” M-KOPA has also increased the size of its on-the-ground workforce, which it refers to as its sales force. Before COVID, M-KOPA had a 2,500-strong active seller base in the start of 2020. In 2020, that number will have doubled to 5,000. Then to 10,000 in 2021. Moore stated that his company intends to double that number to 20,000 by the end of the year. M-KOPA claims to have secured more than $600 million in finance for its 2 million underbanked customers across its markets to far.

“We’re allowing clients who wouldn’t have been able to get that type of help otherwise to reinvest it in productive assets that help them produce more money in their lives,” Patel added.

“When we question our customers how they utilize the products or services, which we do on a regular basis, over 30% of them claim they use it to supplement their income and sustain their livelihoods,” says the company. M-KOPA performs in a rather sweltering pay-per-view environment. Yes, firms like PEG Africa and Bboxx provide this model for solar systems; but, few cross-sell other services to clients like M-KOPA does. However, specialized companies like SafeBoda, Asaak, and Tugende (which are similar to M-KOPA save for the solar systems) are quite active in providing smartphone and motorcycle finance to riders.

Beyond asset financing, though, the Kenyan firm has a wider goal in mind. M-KOPA will be able to scale financial services products like health insurance, cash loans, and BNPL merchant partnerships as a result of the new investment, which will allow the company to grow its flexible daily and weekly payment model. In addition, M-KOPA intends to spend more in order to develop its client relationships and technology.



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