A Kenyan door-to-door sales company lost over $50 million after the Canadian government invested $12.8 million, according to Blacklock's Reporter.
M-Kopa Holdings Ltd., a Kenyan company which sells solar-powered appliances, received $12.8 million from the Canadian government organization FinDev in 2018. The company laid off 150 workers just days after receiving the investment.
The company, founded by Canadian Jesse Moore, has previously received endorsements from notable figures such as Barack Obama and Al Gore.
The investment was the very first for FinDev, a government agency founded by the Trudeau government. At the time in which FinDev invested in M-Kopa Holdings, FinDev lacked a board of directors, a chief investment officer, and a head office. The company only had nine staff at the time, including a lawyer and a "gender advisor."
According to records, the investment was promoted by Paul Lamontagne, who was CEO of FinDev before he abruptly resigned after a company he has done business with in South Africa fell under a stock trading investigation.
Lamontagne justified the investment by stressing of his own experience working in Kenya.
Despite the large and immediate losses, FinDev defended the investment.
"A thorough due diligence process was completed and operating losses normally seen in an early stage growth company in the off-grid solar sector were signaled," claimed FinDev spokesperson Shelley Maclean. "It has high potential for development impact results and long term financial returns."
Maclean further defended the investment on feminist grounds, pointing out that 48 percent of the company's employees were women. Maclean also suggested that such losses are "normal" for startups, saying "by definition equity investments are not secured."