MICROCAPITAL BRIEF: M-Kopa Solar Raises $19m in Private Equity Investment to Expand Pay-As-You-Go Model in East Africa

M-Kopa Solar, a Kenya-based “pay-as-you-go” solar energy supplier for homes in Africa that do not have traditional electricity connections, has raised KES 2 billion (USD 19 million) in an equity round led by London-based Generation Investment Management LLP.

M-Kopa Solar’s business model involves customers acquiring a solar system for USD 30 and then purchasing daily usage “credits” for USD 0.50. Since its commercial launch in October 2012, M-Kopa has served 280,000 homes in Kenya, Tanzania and Uganda. With the new capital raised, M-Kopa will expand its management team, product portfolio and international operations [1] [2].

“We’re proving that solar power for the off-grid world will be transformative for customers, good for the planet and profitable for investors,” said Jesse Moore, the CEO and co-founder of M-Kopa Solar [1] .

“With 1.3 billion people currently off-grid, M-Kopa Solar’s innovative model means that modern solar-powered appliances can be made affordable to a huge new market. In addition to attractive long-term financial returns, this brings clear climate advantages and financial savings for low-income customers,” said Colin le Duc, A partner at Generation Investment Management [1].

Including the investment by Generation Investment Management LLP, M-Kopa Solar has raised KES 5 billion (USD 51 million) in debt and equity funding since its founding in 2010 [1] [3] [4][5].

About M-Kopa Solar

M-Kopa Solar is a “pay-as-you-go” solar energy system developer that was founded in 2010 in Nairobi, Kenya. M-Kopa Solar’s business model works as follows: customers acquire a solar system for USD 30 and then purchase daily usage “credits” for USD 0.50. Since its commercial launch in October 2012, M-Kopa has provided 280,000 homes in Kenya, Tanzania and Uganda with solar power. As of December 2015, M-Kopa Solar has closed five rounds of debt and equity funding totaling KES 5 billion (USD 51 million).

About Generation Investment Management

Generation Investment Management is an owner-managed partnership established in 2004 with offices in London, United Kingdom, and New York, United States. The firm’s investments focus on reducing climate change and environmental degradation; alleviating poverty and encouraging development; water and natural resources; addressing pandemics and other forms of healthcare; and demographics, migration and urbanization. The firm is authorized and regulated in the United Kingdom by the Financial Conduct Authority. As of October 2015, Generation Investment Management has USD 12 billion in assets under management

By Kevin van den Brink, Research Associate

Sources and additional resources

[1] M-KOPA Solar, News, Generation Investment Management Leads USD 19 Million Round In M-KOPA Solar, http://solar.m-kopa.com/wp-content/uploads/sites/4/2015/02/M-KOPA_Generation-FINAL-021215.pdf

[2] M-KOPA Solar, News, Company Overview, http://solar.m-kopa.com/about/company-overview/

[3] M-KOPA Solar, News, M-KOPA Solar Brightens Off Grid Solar Market, http://www.m-kopa.com/press-release/m-kopa-solar-brightens-off-grid-solar-market/

[4] M-KOPA Solar, News, M-KOPA Solar Closes Fourth Funding Round, http://www.m-kopa.com/press-release/m-kopa-solar-closes-fourth-funding-round/

MicroCapital Universe Profile: M-KOPA Solar

MicroCapital Universe Profile: Generation Investment Management

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