Four foreign funds, including one co-owned by former US Vice-President Al Gore and British government investing arm, CDC, have bought an estimated 40 percent stake in asset finance fintech M-Kopa for an undisclosed value through a debt swap deal.
Generation Investment Management, which was co-founded Mr Gore, CDC and LGT Lightrock—a private equity fund backed the Liechtenstein royal family — will get a combined 36.04 percent stake for converting their loans in M-Kopa into shares, people familiar with the deal say.
LR Africa Holdings Limited will buy less than a five percent stake in the company that currently has over 40 owners, including GIM CSF II (Cayman), Adolf H Lundin Charitable Foundation, Gray Ghost Doen Social Ventures Cooperatief Ua, Sumitomo Corporation and Erick Donasian.
M-Kopa has raised billions of shillings for expansion, including $75 million (Sh8.5 billion) in March this year. Three of the four foreign funds offered part of the cash.
Yesterday, the Competition Authority of Kenya (CAK) approved the M-Kopa deal as the firm seeks to go beyond asset financing to include health insurance, cash loans and buy-now-pay-later merchant partnerships.
“The proposed transaction involves the conversion into equity of certain convertible loan notes (debt) issued by the target to the acquirers and the amendment and recapitalisation of the target share capital. This will result in change of control in the target,” the CAK said.
M-Kopa has raised Sh22.8 billion ($190 million) from investors in over 16 rounds over the years to expand its asset finance business that allows customers pay for green energy products in instalments.
M-Kopa started in 2011 as a retailer of solar-powered electrical equipment. It has also partnered with companies like Safaricom’s to offer Internet-enabled handsets under ‘lipa mdogo mdogo’ concept and electric mobility companies Roam and Arc Ride offering two- and three-wheeled electric scooters and bikes through flexible financing terms.
More off-grid solar power start-ups are trooping to Kenya’s rural areas offering pay-as-you-go kits in a race to claim customers who lack reliable access to electricity.
M-Kopa’s competitors include PAYGO asset financing companies like 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.
