Umba, a startup digital bank for emerging African markets has secured a $2 million seed funding round from new investors including Lachy Groom, ex-Head of Issuing at Stripe; Ludlow Ventures; Frontline Ventures, and Act Venture.
Currently, Umba is in active operation in Nigeria and Kenya. The digital banking outfit is changing the narrative by offering alternative financial services from what is obtainable from the legacy African Banks.
The mobile application simplifies digital payment and offers seamless services like Currently operating in Kenya and Nigeria, Umba offers a digital financial service alternative to legacy African banks.
Its mobile app allows customers free access to check their account balances, free and instant peer-to-peer lending, lending, deposits, BillPay, and cashback. This is in contrast to the generally high-cost associated with the traditional banking institutions in African countries.
At the moment, the service is available in Kenya and Nigeria, which have a combined population of over a quarter of a billion people. Umba competes with Kudao, Carbon, Eversend, and “Chip or cash” methods.
Umba’s CEO Tiernan Kennedy said: “From the outset, we built our platform to serve multiple markets, currencies, and payment infrastructures. This flexibility is an extremely important consideration as it’s much difficult to upgrade your systems at a later date.
Bank and debit card penetration is high in Nigeria, so Umba is deeply integrated into those payment methods, while across Kenya and East Africa mobile money has gained a lot of traction, therefore our platform is tightly integrated with those services, too.”
Ludlow ventures partner Brett deMarrais said: “Umba is the first investment we’ve made in the African market and it’s one we were excited to participate in. The Umba team has an excellent service that reduces the cost of banking for their customers while democratizing access”.
Speaking further, he noted that the shift from physical branch infrastructure was already underway and it has accelerated this year. It’s clear the African market is maturing and that we’re entering a very interesting phase. The peer-to-peer lending feature will also make life easier.
The news comes shortly after Stripe’s $200 million acquisition of Nigerian payment service startup Paystack as well as the acquisition of DPO Group for $288 million and Sendwave for $500 million, showing a booming ecosystem breaking records in venture rounds and acquisitions.
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