Through a debt swap agreement, four foreign firms, including one co-owned by former US Vice President Al Gore and the British government investing arm, CDC, have acquired an estimated 40% stake in the asset finance fintech company M-Kopa.
CDC, LGT Lightrock, and Mr. Gore, who co-founded Generation Investment Management, will receive a combined 36.04 percent stake for converting their loans in M-Kopa into shares, according to people familiar with the deal. LGT Lightrock is a private equity fund backed by the Liechtenstein royal family.
The firm now has over 40 shareholders, including GIM CSF II (Cayman), Adolf H Lundin Charitable Foundation, Gray Ghost Doen Social Ventures Cooperatief Ua, Sumitomo Corporation, and Erick Donasian. LR Africa Holdings Limited will purchase less than a five percent interest in the business.
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Several billion shillings have been raised by M-Kopa for expansion, including $75 million (Sh8.5 billion) in March of this year. A portion of the money was offered by three of the four international funds.
The M-Kopa acquisition has been authorised by the Competition Authority of Kenya (CAK), as the company aims to expand beyond asset finance to include health insurance, cash loans, and buy-now-pay-later merchant relationships.
“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.
In order to grow its asset financing business, which lets consumers pay for green energy items in instalments, M-Kopa has received Sh22.8 billion ($190 million) from investors over the years in over 16 rounds.
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M-Kopa began selling solar-powered electrical devices in 2011. Additionally, it has worked with businesses like Safaricom to offer Internet-enabled mobile phones under the “lipa mdogo mdogo” idea, as well as Roam and Arc Ride, two electric mobility firms, to provide two- and three-wheeled electric scooters and cycles with flexible financing options.
Kenya’s rural areas are seeing an increase in the number of off-grid solar power start-ups selling pay-as-you-go kits in an effort to win over clients who lack consistent access to energy.
In addition to 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, PAYGO asset financing firms are also competitors of M-Kopa.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert.
As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard. You can book a session and speak with him using the link: https://insightsbyexperts.com/view_expert/charles-rapulu-udoh