M-Kopa, a Kenyan fintech, Raises a record Sh35 billion in Debt and Equity

M-Kopa, a solar and asset financing firm, has secured Sh35 billion ($255 million) in new debt and equity financing for its expansion in Sub-Saharan Africa from Standard Bank and Japanese trading house Sumitomo Corporation, among others.

According to M-Kopa, the capital injection consists of Sh7.5 billion ($55 million) in equity and Sh27.4 billion ($200 million) in debt. This is the most money ever raised by a Kenyan start-up. M-Kopa’s financing platform, which was launched in 2011, allows underbanked customers to access a wide range of products and services without the need for collateral or a guarantor through a flexible payment model.

“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,” M-Kopa Solar CEO and co-founder Jesse Moore said.

Standard Bank led the funding round, advancing $200 million in sustainability-linked debt financing, while Sumitomo invested $36.5 million in new equity. Light rock, a UK-based investment firm, was also a participant in the fund-raising, according to M-Kopa.

“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,” Standard Bank Corporate Financing Solutions manager Nick Riley said.

In addition to operating in Kenya, the company has branches in Ghana, Nigeria, and Uganda. Approximately Sh137 billion ($1 billion) in credit has reportedly been accessed by over 3 million customers in the region to pay for things like smartphones, solar power systems, and health insurance.

Millions of shillings have been raised by M-Kopa for expansion, including $75 million in March of last year.

Since its inception, it has raised more than Sh22 billion from investors in over 16 rounds, allowing it to develop its asset finance business and enable customers to pay for green energy products over time.

Kenya’s rural areas are seeing an increase in the number of off-grid solar power start-ups offering pay-as-you-go kits in an effort to win over customers who lack reliable access to electricity.

Environmental objectives

In addition to Solar Panda, D.Light, Greenlight Planet, Aspira, Bboxx, Azuri, Biolite, Daima Energy, Delta Energy Systems Ltd, Kensen, Mobisol, PowerGen, Solargen, Sunking, Suntech, ZilanSolar, Thrivesolar, Ofgen, Strauss Energy, and ORB Energy, PAYGO asset financing firms are also competitors of M-Kopa.

“Although the last decade has seen M-Kopa grow impressively, they have ambitions to reach a target of over 10 million customers over the next few years, as well as expand further into various African markets,” Standard Bank said in a statement.

“This ambition calls for a considered effort to ensure sustainable growth over the coming years. Standard Bank supports these ambitions by incentivising M-Kopa to reach its environmental and social goals by embedding a series of Environmental, Social and Green key performance indicators within the funding structure, spanning from gender equality to sustainability.”