Solar and asset financing firm M-Kopa has secured Sh35 billion ($255 million) financing in new debt and equity from Standard Bank and Japanese-based trading house Sumitomo Corporation among others for expansion in sub-Saharan Africa.
M-Kopa said on Monday that the capital injection includes Sh7.5 billion ($55 million) in equity and Sh27.4 billion ($200 million) in debt. This is the highest ever to be raised by a Kenyan start-up. Launched in 2011, M-Kopa’s financing platform enables underbanked customers to access a broad range of products and services without 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.
The funding round was led by Standard Bank which advanced $200 million in sustainability-linked debt financing, while Sumitomo had injected $36.5 million in new equity investment. Other participants in the fund-raising included UK-based investment firm Lightrock, M-Kopa said.
“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.
The firm operates in Kenya and has expanded to Uganda, Nigeria and Ghana. It says over 3 million customers in the region have accessed about Sh137 billion ($1 billion) in credit to buy items like smartphones, solar power systems and health insurance.
M-Kopa has raised billions of shillings for expansion, including $75 million in March last year.
It has received more than Sh22 billion from investors in more than 16 rounds since its inception to expand its asset finance business that allows customers to pay for green energy products in instalments.
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.
“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.”