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.
In exchange for converting their loans in M-Kopa into shares, Mr Gore’s Generation Investment Management, CDC, and LGT Lightrock—a private equity fund backed by the Liechtenstein royal family—will receive a combined 36.04 percent stake, according to people familiar with the agreement.
Several billion shillings have been raised by M-Kopa for expansion, including $75 million (Ksh8.5 billion) in March of this year. A portion of the money was offered by three of the four international funds.
The M-Kopa merger was yesterday approved by Kenya’s Competition Authority (CAK), as the company aims to expand beyond asset financing to offer health insurance, cash loans, and collaborations with buy-now-pay-later retailers.
In order to grow its asset finance business, which lets customers pay for green energy items in instalments, M-Kopa has raised Ksh22.8 billion ($190 million) from investors over the years in over 16 rounds.
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.
The company now has over 40 owners, 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 stake in the business.
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