85% of Africans live on less than $5.50 per day according to a World Bank report. Unbanked and underbanked adults don't have access to credit and can't afford important purchases.
Since launching as an energy provider, M-KOPA's financing platform has proved helpful to this group of users. The company, which enables underbanked customers in select African markets to access a broad range of products and services without a guarantor, announced today that it has raised $75 million.
M-KOPA highlighted the growth equity round in its press statement, which is its fifth equity round. The total equity raise is $190 million.
The CDC Group, HEPCO Capital Management, and LocalGlobe are previous backers of this round. Broadscale Group and Generation Investment Management led the growth equity round.
Jesse Moore is the CEO of the company. M-KOPA's pay-as-you-go (PAYG) financing model allows customers to build ownership of appliances over time by paying an initial deposit followed by flexible micro-payments.
Solar-power home systems were designed for lower-income and rural customers without electricity in Uganda. It has expanded its pay-as-you-go model to include other needs such as TVs, refrigerators, solar lighting and digital financial services.
The geographical reach of the company has changed. M-KOPA was focused on East Africa for six years, but now it is in five other countries.
Ex-SafeBoda executive Babajide Duroshola joins M-KOPA to lead expansion into Nigeria
The full suite of M-KOPA's offerings can be accessed in the company's more established markets. Customers in the company's other two newer markets are not eligible for financing at the moment. In 18 months, M-KOPA sold half the units of solar systems that they had managed in 10 years.
When we launch in new markets, we start with one product, which is our smartphone financing. We have a broader portfolio of products in our more mature markets, but we need to scale up quickly in a new market, and we start just on the device financing.
Over 50,000 customers have been acquired by M-KOPA since it was launched in Nigeria. They say that the new market in Ghana has grown two times as fast as any of its previous markets.
M-KOPA plans to launch in one new market this year and in 2023, as part of its growth plans, which came off the back of this recent funding. In the second half of this year, the company will expand its offerings in Nigeria and the first quarter of next year in Ghana.
The platform provides financing and digital financial services to underbanked consumers in four markets by matching fractional payment terms with customers.
Its customers range from ride-Hailing drivers to small kiosks owners who use their phones to run their businesses. To afford a $100 phone in a market where a lot of adults earn less than $5 a day is a luxury.
Consumers can make a down payment or small deposit on a phone with M-KOPA. Consumers in all markets are required to pay between 30 cents and $1 a day to offset the remaining costs at an average monthly interest rate of 3.1%.
The model that we have is very inclusive in terms of who can qualify. Most credit instruments have a number of restrictions on them, and that's the limiting factor for so many people when it comes to financial inclusion, said Moore, the chief executive.
Everyone is welcome with M-KOPA's model. If you can pay the upfront deposit, that's all we need. If you're in Lagos or semi-urban Nairobi, you can immediately put the solar system or phone in the hands of the consumers.
The business of M-KOPA was spurred by the Pandemic and 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884
M-KOPA took eight years to reach its first million customers, but only 18 months to reach its second million. The company's customer base is projected to reach 3 million in the next nine months, having almost recorded a 2.5x growth of new customers from 2020 to 2021, according to CEO Moore.
M-KOPA claims to have created thousands of income-earning jobs while adding over 500 full-time positions in the last two years.
M-KOPA's sales force has doubled. M-KOPA had an active seller base of 2,500 at the beginning of 2020. In 2020 it doubled to 5,000. In the year 2021. to 10,000. Moore said his company will increase that number to 20,000 by the end of the year.
M-KOPA claims to have unlocked $600 million in financing for its 2 million underbanked customers.
Customers who otherwise could not have access to that kind of support are being given the opportunity to put that back into productive assets that are helping them generate more income in their lives.
When we go back to our customers and ask them how they use the products or services, over 30% of them report back to us that they use this to support their livelihoods.
M-KOPA plays in a pay-as-you-go space. Many companies provide this model for solar systems, but few cross-sell other services to customers like M-KOPA does. SafeBoda, Asaak, and Tugende are companies that are very active in niche cases, providing motorcycle financing for riders.
There is a bigger picture for the company beyond asset financing. M-KOPA will be able to expand its flexible daily and weekly payments model with the new investment. M-KOPA plans to spend a lot and strengthen its relationship with its customers.
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