M-KOPA, the Nairobi-based fintech poster child celebrated for bringing smartphones and solar power to millions of underbanked Africans, is facing serious allegations from within its own founding team.
Co-founder Chad Larson has filed a formal complaint accusing the company’s board of orchestrating an “unfair and manipulated” share valuation process designed to buy out Kenyan employees’ equity stakes at dramatically suppressed prices, according to documents reviewed by Techmoonshot.
The allegations threaten to tarnish the reputation of one of Africa’s most high-profile fintech success stories—a company that has raised over $250 million from blue-chip investors and was recently valued north of $1 billion.
The Public Face vs. Private Reality
On the surface, M-KOPA appears unstoppable. Just last August at Tokyo’s TICAD 9 conference, CEO Mayur Patel signed a high-profile Memorandum of Understanding with Japanese banking giant Sumitomo Mitsui Banking Corporation (SMBC) to “strengthen financial inclusion efforts in Africa.”
The optics were impeccable: a homegrown African tech company partnering with a $70 billion global financial institution to expand access to the continent’s informal economy.
But behind the conference stages and press releases, a very different story has been unfolding—one of internal strife, alleged corporate manipulation, and a widening rift between M-KOPA’s founding vision and its current governance.
A Co-Founder Turns Whistleblower
Chad Larson, who helped build M-KOPA from its earliest days, has broken ranks with the company’s leadership, filing what sources describe as a “scathing” complaint alleging the board deliberately engineered a lowball valuation to execute what he characterizes as a forced buyout of employee shares.
“This isn’t about one disgruntled employee,” a person familiar with the matter told Techmoonshot on condition of anonymity. “This is a co-founder saying the company has fundamentally betrayed the people who built it.”
The complaint, details of which remain confidential, reportedly alleges that M-KOPA’s board commissioned a valuation that significantly undervalued the company’s shares, then used that artificially depressed price to pressure Kenyan employees—many of whom joined early and accepted equity in lieu of higher salaries—to sell their stakes back to the company.
“The irony is thick,” said one former M-KOPA employee who requested anonymity. “Here’s a company whose entire brand is built on financial inclusion and fairness for the underserved, and it’s allegedly using financial engineering to shortchange its own team.”
Not the First Crack in the Foundation
The Larson complaint isn’t M-KOPA’s first internal legal battle. The company is already defending itself against a lawsuit filed by another former employee over allegations of share dilution—claims that previous funding rounds unfairly watered down early employees’ equity stakes without proper disclosure or compensation.
While share dilution is common in venture-backed startups, critics argue M-KOPA’s case is particularly egregious given the company’s public positioning as a champion of economic empowerment for everyday Africans.
“You can’t be the poster child for financial inclusion while allegedly excluding your own employees from sharing in the value they created,” said a prominent African venture capitalist who spoke on background due to professional relationships with M-KOPA investors.
The Pay-As-You-Go Model: A Double-Edged Sword?
M-KOPA pioneered the pay-as-you-go model in Africa, allowing customers in Kenya, Nigeria, Uganda, and Ghana to access smartphones, solar systems, and other products through daily micro-payments collected via mobile money.
The model has been genuinely transformative, connecting more than 3 million customers who previously lacked access to formal credit or affordable technology. The company processes over $500 million in customer payments annually.
But employees and former staff interviewed by Techmoonshot suggest the same pay-as-you-go philosophy—extracting maximum value from small, frequent transactions—may have influenced how management approached employee equity.
“They understand the power of controlling payment terms,” said one person close to the situation. “The question is whether they applied that same leverage to their own people.”
Investors Face Uncomfortable Questions
M-KOPA’s cap table reads like a who’s-who of impact investing: Generation Investment Management (co-founded by Al Gore), CDC Group (now British International Investment), and a roster of development finance institutions betting that profitable business can drive social impact.
The Larson allegations put those investors in an awkward position. Many explicitly market themselves as responsible capital partners committed to ethical governance and stakeholder inclusion—values now being questioned within M-KOPA itself.
“Impact investors talk a big game about treating workers fairly and ensuring shared prosperity,” said an investor at a competing African fintech, speaking anonymously. “If these allegations are true, it raises serious questions about whether they’re doing adequate governance oversight or just chasing returns with better PR.”
Representatives for Generation Investment Management and British International Investment declined to comment. Other M-KOPA investors did not respond to requests for comment by publication time.
The Kenyan Context
The allegations carry particular weight in Kenya, where M-KOPA is headquartered and employs the bulk of its African workforce.
Kenya has become a global fintech hub, but concerns about foreign-led companies extracting value while leaving local employees behind have been growing. The controversy around M-KOPA risks feeding a narrative that even the most celebrated “African” success stories are ultimately designed to enrich foreign capital at local expense.
“It’s not lost on anyone that the people allegedly being squeezed out are primarily Kenyan, while the board making these decisions skews heavily foreign and investor-dominated,” noted a Nairobi-based tech ecosystem observer.
M-KOPA’s Response
M-KOPA declined to comment on specific allegations, citing ongoing legal matters. In a brief statement, a company spokesperson said:
“M-KOPA is committed to fair treatment of all employees and operates with the highest standards of corporate governance. We do not comment on personnel matters or active legal proceedings, but we categorically reject any characterization of our equity practices as unfair or manipulated.”
The company did not respond to detailed questions about its share valuation process, whether employees were given adequate disclosure about dilution, or whether the board had considered alternative approaches to share buybacks.
What Happens Next
Legal experts say Larson’s position as a co-founder gives his complaint significant weight, potentially opening discovery processes that could reveal internal communications and board deliberations about the valuation and buyout process.
“Co-founder complaints are different from standard employee disputes,” explained a Kenyan employment attorney not involved in the case. “He likely has historical knowledge, documents, and standing that make this much harder for the company to dismiss.”
If the allegations prove true, M-KOPA could face:
- Shareholder lawsuits demanding proper valuation and compensation
- Regulatory scrutiny from Kenyan authorities
- Reputational damage that undermines its financial inclusion brand
- Employee retention challenges as word spreads internally
- Investor pressure to resolve governance issues
The case also highlights broader questions facing Africa’s venture-backed tech ecosystem: Who really benefits from these companies’ growth? Are local employees being treated as true stakeholders or just human resources to be optimized? And are impact investors doing enough to ensure the companies they back live up to their stated values?
The Bigger Picture
M-KOPA’s troubles arrive at a pivotal moment for African tech. After years of explosive growth and record funding, the sector is facing a reckoning as investors demand profitability and scrutinize governance more closely.
The industry has already weathered scandals around labor practices, data privacy, and predatory lending. Allegations of insider dealing and employee exploitation threaten to further erode trust at a time when African tech can least afford it.
For M-KOPA specifically, the stakes are existential. The company built its brand on empowering the financially excluded. If it can’t demonstrate that its own employees—the very people who built that brand—were treated fairly, it risks becoming a cautionary tale about mission drift and the corrupting influence of venture capital.
As one industry veteran put it: “You can’t sell financial dignity to customers while denying economic dignity to the people who made it possible. Eventually, that hypocrisy catches up to you.”
Do you have information about workplace practices at M-KOPA or other African tech companies? Contact us securely at hello@techmoonshot.com
