Kenyan pay-as-you-go solar energy startup M-KOPA Solar has raised a US$19 million funding round, to be used to expand the company’s management team, product range and international operations.
The funding round was led by London-based Generation Investment Management – founded by former US Vice President Al Gore together with David Blood -, and also included new investments by Sir Richard Branson – founder of Virgin Group -, and Jean and Steve Case – founder of AOL -, as well as reinvestment by existing shareholders.
M-KOPA Solar is the market leader of ‘pay-as-you-go’ energy for off-grid customers, combining mobile payments with GSM sensor technology to enable the leasing of solar power systems.
The startup says it is on track to reach its initial target of equipping one million homes in East Africa with solar energy by the end of 2017, having already reached over 280,000 homes in Kenya, Tanzania and Uganda.
“We’re very pleased to have the world’s leading sustainability investors and entrepreneurs backing us at M-KOPA. We’re proving that solar power for the off-grid world will be transformative for customers, good for the planet and profitable for investors. In just three years we’ve reached over a quarter-million homes across three countries and we are just getting started,” said Jesse Moore, chief executive officer (CEO) and co-founder of M-KOPA Solar.
M-KOPA makes its solar home systems affordable to low-income households on a pay-as-you-go installment plan. Customers pay a deposit of US$30, followed by 365 daily mobile money payments of US$0.50 – or less than they would normally spend on kerosene fuel for lighting. After completing the payment plan, customers own their systems and can also upgrade for more power.
“Under the stewardship of an outstanding management team, we believe that M-KOPA has consistently demonstrated its role as a global leader in terms of robust technology, market traction and scale. With 1.3 billion people currently off-grid, M-KOPA’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, partner at Generation Investment Management.
Disrupt Africa reported in February M-KOPA closed its fourth funding round, raising US$12.45 million. In December 2013, the startup raised a US$20 million round, with two other rounds prior to that.
This year it also became the first company from Sub-Saharan Africa to win the Zayed Future Energy Prize, announcing it would use the US$1.5 million winnings to launch a training and development programme called M-KOPA University.
