Innovative Kenyan lender M-Kopa has raised $75 million in an equity funding round, bringing its total equity funding to $100 million. The Generation Investment Management and Broadscale Group led round drew participation from new investors Latitude Fund (Local Globe) and HEPCO Capital Management alongside M-Kopa’s existing backers CDC Group and LGT Lightrock.
M-Kopa customers grew 2.5x in its 2021 market expansion
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M-Kopa’s financing model offers customers instant access to everyday products while building ownership over time through micro-payments. The company claims that its offering costs an average monthly interest rate of 3.1 percent, undercutting other credit services by a large margin.
The company will use this funding to cement its presence in existing markets Nigeria, Uganda and Ghana, and expand to additional territories. It will also diversify its asset financing service offering with the addition of buy-now-pay-later merchant partnerships, cash loans and health insurance.
“We’re thrilled to partner with leading global investors with deep experience supporting growth-stage companies as we expand our platform to serve more of our customers’ needs,” says M-Kopa co-founder and CEO Jesse Moore. “With this funding, we will expand to more markets across Africa and scale to over 10 million customers in the next few years.”
M-Kopa first offered underbanked customers finance for pay-as-you-go solar power to off-grid homes in 2011, before extending to smartphones, TVs and domestic appliances in 2012. It has since provided over $600m in financing to over two million customers, and projects that it will reach three million before the end of 2022.
“We were early supporters of M-Kopa and continue to be impressed by the continued innovation of its product offerings and ability to accelerate at a significant scale,” said Dave Easton, partner in Generation Investment Management’s growth equity team about the additional commitment. “We are pleased to continue supporting M-Kopa as it scales further.”
Company CMO Mayur Patel targets improved integration into customer earning and spending cycles as the primary growth vehicle, calling this a “massive opportunity to make everyday essentials more accessible.”
Read more: Kenyan fintech M-Kopa announces Nigeria expansion