Kenya based ‘pay-as-you-go’ energy provider to off-grid homes, M-Kopa Solar has raised over US$10 million from several firms including Canada’s newly launched development finance institution, FinDev Canada, CDC and includes investments by existing shareholders Generation Investment Management and LGT Venture Philanthropy.
The company had already connected 600,000 homes across Africa, providing 75 million hours of kerosene-free lighting each month with its battery-powered systems that come with lights, phone-charging, and a solar-powered radio.
“M-KOPA is exactly the type of entrepreneurial company that FinDev Canada wants to support,” said Paul Lamontagne, Managing Director of FinDev Canada. “Our investment will allow M-KOPA to reach more households across East Africa, providing access to clean power, creating significant levels of employment, and helping customers save money and build a credit history. Services like these have a favourable impact on women.”
Customers make daily mobile money payments which is less than the cost of traditional fuels. After completing their payment plan, the customer owns the system outright.
To date, M-KOPA has sold over 250,000 of these upgrade assets including more lights, televisions, energy-efficient cooking stoves, water tanks and internet-enabled smartphones.
“M-KOPA is about upgrading our customers’ lives with high-quality and affordable energy solutions.” “This investment will help us to bring power to another one million households over the next five years,” said Jesse Moore, chief executive of M-KOPA
But this has come amidst layoffs of a number of staff including 78 of its developers in Kenya. According to a report by Business Daily, M-Kopa Solar fired 450 workers in its subsidiaries in four countries to ease operational costs and boost profitability.
According to the firm’s founder and CEO, Jesee Moore, the layoffs were necessary to reduce the fixed costs and keep the firm on the path to profitability.
“This was done to reduce fixed costs and keep us on the path to profitability which resulted in job reductions across offices in Kenya, Uganda, Tanzania, and the UK, reducing our global headcount by 18 percent,” he said
Founded in 2011, M-Kopa is largest “pay-as-you-go” energy services for off-grid customers. They have developed a proprietary, patented technology platform that combines embedded GSM + mobile payments to revolutionize asset financing in emerging markets. To date, the company has raised over US $161M and is one of the most funded startups operating in Africa.