A public spat between M-Kopa co-founder Chad Larson and the company’s current management and investors has blown up into a governance crisis that risks distracting the fast-growing fintech just as it celebrates a long-awaited return to profitability.
On Nov. 6 Mr. Larson filed a formal complaint with Kenya’s Capital Markets Authority (CMA), alleging that a proposed buyback of shares from Kenyan employees is based on a “biased, manipulated” valuation that discounts M-Kopa’s worth by as much as 95%.
The complaint, copies of which were circulated in the press and on social media, accused board members, advisers and a lead investor of structuring the transaction to favor large shareholders (notably Japan’s Sumitomo Corporation) at the expense of local staff and minority holders.
M-Kopa and the investors responded to the allegations three days later, calling Larson’s accusations “baseless” and a coordinated campaign to undermine the company during a critical funding window.
The company’s communications team said Larson resigned in 2018 and has since had only a small founder stake — roughly 1% — while asserting the CMA lacks jurisdiction because M-Kopa is not a listed Kenyan company, stating that the transaction concerns private share sales in a UK-incorporated group. M-Kopa said it would “exercise its full legal rights” against what it described as defamatory claims.
Sumitomo led a multi-million dollar capital injection in 2023 and is aid to be in Series F transaction talks to increase its stake. Larson’s letter and public commentary came as the company pursues new financing and exits for early investors, a sequence that M-Kopa says Larson has repeatedly sought to disrupt.
Beyond the immediate buyback row, the dispute revives a string of legal and regulatory clashes that have dogged M-Kopa in recent years. Former employee Elizabeth Njoki filed a high-profile lawsuit alleging racial discrimination in the employee share scheme, a petition that the Employment and Labour Relations Court has flagged as involving shareholding and valuation issues and ordered transferred to the High Court’s Constitutional Division.
The Njoki case has become a touchstone in Larson’s critique, which points to structural changes to employee share classes between 2019 and 2022 that, he says, disadvantaged African staff.
M-Kopa has also fought tax litigation in Kenyan courts, including a 2024 judgment on assessments and withholding tax matters, and has on occasion sought to have shareholder disputes adjudicated in UK forums because the parent company is UK-incorporated. Those preexisting court battles and questions about jurisdiction mean the current fight could play out simultaneously in multiple venues, prolonging uncertainty for staff and investors alike.
The dispute comes at an ironic moment in M-Kopa’s financial arc. After more than a decade of heavy investment and repeated losses, the company reported its first ever profit for 2024, a turnaround widely reported as a KES 1.2 billion (about US$9.2 million) net gain after a KES 3.2 billion loss the previous year. Revenue growth has been dramatic, with analysts pointing to a surge in device sales and higher interest income from credit-financed customers.
That performance is the flip side of years of fundraising: M-Kopa has taken in substantial equity and debt from development and strategic investors commonly reported as in excess of $250 million while running at a loss for much of its life until last year’s profit.
The needle-moving question for staff, minority shareholders and potential new backers is whether the valuation being used in the employee buyback fairly reflects that progress or freezes out the people who helped build the business.
Legal experts say the next phase will likely involve parallel actions: Larson’s complaint to the CMA may be dismissed on jurisdictional grounds, while aggrieved employees could press their claims in Kenyan courts and investors protect their contractual rights in UK-bound forums. In the meantime, governance experts warn, prolonged public acrimony risks eroding morale, complicating fundraising and distracting management from execution at a pivotal moment.
For now, M-Kopa insists the claims are false and that it will defend its reputation and transactions vigorously; Larson says he is acting to defend Kenyan employees’ interests. With fresh profit on the ledger but decades of investor capital behind it, the company must now tamp down a governance dispute that — if it lingers — could threaten the very investor confidence that helped it survive to profitability.
Brief History of M-Kopa
M-Kopa was founded in Nairobi, Kenya, in 2011 by Jesse Moore, Nick Hughes, and Chad Larson.
The three founders had previously worked together at the Bill & Melinda Gates Foundation–supported M-Pesa team (Nick Hughes is widely credited as the “father of M-Pesa”). They created M-Kopa as a way to extend M-Pesa’s mobile-money rails into asset financing for low-income households.
Original Business Line (2011–2016): Solar Home Systems
M-Kopa’s initial and defining business was pay-as-you-go solar energy.
The company offered small solar home kits typically a panel, battery, lights, and sometimes a radio or TV sold through a daily mobile-money repayment model, allowing off-grid households to replace kerosene with clean energy.
Key elements of the original business:
- PAYG solar kits financed over 12–18 months
- Targeted rural/off-grid homes
- Payments exclusively via M-Pesa
- Business model framed as “asset financing enabled by IoT-locked devices”
This product made M-Kopa one of Africa’s most prominent early PAYG solar innovators.
Current Core Business (2017–present): Digital Micro-Credit for Consumer Assets
While solar is still part of its catalogue, M-Kopa has transformed into a consumer asset financing and digital credit company, with its main revenue now coming from financing smartphones and, increasingly, electric motorcycles and household electronics.
Its current core business is:
- Smartphone financing (Samsung, Nokia, Xiaomi partners)
- Credit for TVs, fridges, and other electronics
- Financing for productive assets, including electric and petrol motorbikes
- Micro-loans and cash advances offered to existing customers based on repayment history
The company now describes itself primarily as a fintech asset-financing platform, rather than a solar company.
In Summary
| Feature | Details |
| Founded | 2011 |
| Where | Nairobi, Kenya |
| Founders | Jesse Moore, Nick Hughes, Chad Larson |
| Original Business | Pay-as-you-go solar home systems for off-grid households |
| Current Core Business | Smartphone financing, asset credit (TVs, fridges, bikes), and customer micro-loans |
If you’d like, I can also provide a short profile of each founder or a timeline of M-Kopa’s business evolution.
