Umba, a Nigerian digital banking company, has secured $15 million in Series A funding. The announcement comes roughly two years after the fintech obtained a $2 million seed investment.
Surprisingly, Umba was able to persuade a couple of Nubank executives to wire some funds as part of this Series A transaction.
Tom Blomfield, the co-founder of Monzo, and previous backers Lachy Groom and ACT Ventures are among the other investors. Lux Capital, Palm Drive Capital, Banana Capital, and Streamlined Ventures were among the new investors, with Costanoa Ventures leading the round. To present, the fintech has secured $17.5 million in funding.
Umba claims to provide a comprehensive choice of transparent and accessible financial products to those who are underserved by legacy banks across Africa, where just 43% of the population has a bank account.
Free bank accounts, interbank transfers, peer-to-peer transactions, and bill payments are among its features.
These are common elements of African digital banks, whether deposit-only like Kuda, credit-only like FairMoney or Carbon, or both like Fintech Farm.
Tiernan Kennedy, Umba’s CEO, stated that the startup follows Nubank’s credit-led approach, in which it first tackles consumers’ liquidity problems before upselling them on a wide range of banking products.
Umba customers can acquire loans in addition to a no-fee current account, free payments, and bill payments.
According to Kennedy, the business provides credit solutions based on proprietary data supplied by customers. The fintech startup makes the majority of its money by charging customers a monthly interest rate of 10%.
The fresh capital will enable the firm to try this out as it plans to launch in new regions where mobile money is popular, including Egypt, Ghana, and Kenya.
In the following 18 months, Umba will expand its product offerings by launching debit cards, savings accounts, and stock trading.
Similarly, for so many years, the rise of fintech has upset the institutional banking business. In a market that has high competition already, FinTech, or new inventive players, are putting a new form of competitiveness on banks.
Actually, banks are already competing with mobile phone operators and money transfer and payment firms. Owing to their innovative mobile money transfer, mobile payment options, and simple bank opening, these competitors now have a large market share and Umba is one of such.
It is worth noting that there are plenty of digital banks in Nigeria and Africa as a whole. This fintech believes that now is the appropriate time to deliver financial services to every marketplace, from the banked to the unbanked, as Africa continues to experience a tremendous rise in mobile usage and the corresponding expanding young population.
These fintech ideas have piqued the interest of investors throughout the years, and it continues to do so as they look to expand their operations to other African countries and incorporate new technologies into their platforms.
Umba has been in business for about two years. Since debuting 18 months ago, the startup has increased its income every three months, with over 1 million installs on Google Play Store.
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