African digital financing company M-KOPA raises continent’s biggest funding rounds at $250m

Africa digital financing firm M-KOPA has raised $250 million in debt and equity financing, according to TechCabal. 

Some $200 million in sustainability-linked debt financing was led by Standard Bank Group with the participation of lenders like The International Finance Corporation (IFC), funds managed by Lion’s Head Global Partners, FMO: Dutch Entrepreneurial Development Bank, British International Investment, Mirova SunFunder, and Nithio.

Also, an additional $55m in equity investment was backed by existing strategic investor Sumitomo Corporation. Blue Haven Initiative, Lightrock, Broadscale Group, and Latitude, the sister fund to Local Globe, also participated in the transaction, according to Fintech Finance.

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The platform says it will use the money to expand its financial services to underbanked consumers across Sub-Saharan Africa. Fintech Finance added that this includes plans to use the new funding to grow its smartphone services, expand its model to new markets, and extend its financed product set.

“At M-KOPA, we are working hard to create a positive environmental and social impact by systematically addressing the barriers to digital financial services. We have already unlocked $1bn in cumulative credit to over 3 million customers, and are proud of the thousands of local jobs we’ve created during tough economic times,” M-KOPA CEO and co-founder Jesse Moore said.

“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 first started operations in East Africa and then expanded to Nigeria, Africa’s largest economy, and Ghana, the second-largest economy in West Africa. 

“From 2020 to 2022, M-KOPA recorded a compound annual growth rate of 85 percent in new customer acquisition and was recently recognized as one of Africa’s Fastest-Growing Top 100 companies by the Financial Times for two consecutive years, in 2022 and 2023,” according to Business Day.

The fintech company has over 3 million customers and has provided a cumulative credit to underbanked customers in Africa amounting to $1 billion.