Kenyan fintech M-Kopa raises record Sh35bn in debt and equity

M-Kopa, a solar and asset finance provider, has acquired Sh35 billion ($255 million) in additional debt and equity funding for its development in Sub-Sahara Africa from Standard Bank and Japanese trading house Sumitomo Corporation, among others.

According to M-Kopa, the capital investment includes Sh7.5 billion ($55 million) in cash 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 clients to access a wide range of products and services without the need for collateral or a guarantor through a flexible payment approach.

“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 loan financing, while Sumitomo invested $36.5 million in new stock. Lightrock, a UK-based investment business, 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

The company is based in Kenya and has now spread to Uganda, Nigeria, and Ghana. It claims that over 3 million users in the region have accessed around Sh137 billion ($1 billion) in credit to purchase products such as cellphones, solar power systems, and health insurance.

M-Kopa has collected billions of shillings for expansion, including $75 million in March of last year.Since its establishment, it has raised approximately Sh22 billion from investors in 16 rounds to build its asset financing business, which lets customers to pay for green energy goods in installments.

In a rush to claim consumers who lack dependable access to energy, more off-grid solar power start-ups are flocking to Kenya’s rural areas, providing pay-as-you-go kits.