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M-KOPA

Harnessing ‘the fire’ to improve African lives

Images: courtesy of M-KOPA

M-KOPA’s Swahili motto ‘Noma Moto’ encapsulates the African company’s mission and its approach to business.

“Moto” means ‘fire’ and “noma” is ‘to improve’. “The idea being: when we see problems, we have this fire to improve them,” explains Jesse Zigmund, M-KOPA's General Counsel and Director of Compliance. “We have what’s called ‘the voice of the customer committee,’ where, cross functionally, we look at the problems that our customers face and ask ourselves what we can do to improve them.”

In 2011, when M-KOPA was founded in Nairobi, it was to provide energy access to millions of African people who lived off grid and were dealing with either no access or very sporadic access to reliable electricity. The solution: to replace kerosene lanterns with solar energy, providing cleaner, safer lighting that enables people to be healthier, wealthier and more productive. To date, the company has sold over 1 million off-grid solar home systems (with integrated SIM card technology), which charge a range of products, including home lighting, radios, torches and telephones. This has benefitted over three million individuals across East Africa and displaced 2 million metric tonnes of carbon emissions – the equivalent of taking a coal-fired power plant offline for 150 days.

By 2015, the company realised that it could take the expertise that it had built up through its solar business serving customers, many of whom were also underbanked, and apply it to a range of different assets such as solar home televisions, water tanks and eco-stoves, through financing solutions to the same, and new, customers. M-KOPA’s next evolution came in 2019 when it expanded into smartphone financing, and today, the company has now financed over 500,000 smartphones across its markets, which in addition to Kenya, include Nigeria and Uganda. Its slogan, ‘Power to Own’ conveys the company’s current mission: to make financing for everyday essentials accessible to everyone. As well as providing insurance to thousands of Kenyans for a variety of different purposes, it has recently expanded into e-mobility solutions.

“What M-KOPA is doing is empowering and uplifting, but also hugely important to lots of families and household groups in the countries that it operates in,” says Adrian Mayer, Partner, in the Corporate team at Charles Russell Speechlys, which has provided legal advice to the company since 2015 on a range of shareholder issues, as well as matters relating to financings, employment, GDPR and management incentive schemes. “To be associated, and to assist, with the M-KOPA mission, is in a small way why we’re in the law,” he adds.

For Zigmund, there are lessons that the rest of the world can learn from Africa. “I would bet that some of the innovative solutions needed to address global issues, such as the climate crisis, will be developed here,” he says. “There's less dependence on old systems, old architecture and old ways of thinking and a cleaner slate. Provided there's the right regulatory environment and enough capital, those ideas will have the space to grow – so watch this space.”

The investor’s view: Colin le Duc, Generation Investment Management

Generation Investment Management manages about US$40bn of assets across public and private equity, and specialises in highly concentrated, long-only sustainable investment. In 2015, it led a US$19m financing round in M-KOPA.

Why did M-KOPA’s model represent such an attractive investment proposition to Generation IM? “It’s a win-win model, where you have authentic sustainability impact and a very profitable, successful business,” explains Colin le Duc, a Founding Partner at Generation IM. “It’s a very good example of how emerging markets can leapfrog the developed economies. You don’t need to rebuild the old electricity grid or the old banking system, you can move directly to what M-KOPA is doing, which is a really interesting representation of the future.”

Add to that a customer value proposition that is “off the charts” and a strong local management team – and you have a powerful blend. He says: “It’s a leadership team that knows how to interact with investors around the world but also knows how to operate on the ground – it’s a really potent mix.”

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