If there’s one thing about the continent of Africa that’s a big fact, it houses an almost infinite amount of opportunities for startups, especially for fintechs. Africa has underbanked and unbanked people in millions, and the presence of digital banks and fintechs focused on the aforementioned people is helping to narrow the continent’s financial gap. Africa as a continent is seeing increasing growth in the adoption and usage of smartphones and their complementary banking options being provided by fintechs. Thanks to these fintechs, people irrespective of who they are and where they are from, can gain access to financial services.
Umba, a digital banking platform focused on the underbanked and unbanked population, has raised $15 million in its Series A financing round. The startup was founded in 2018 by Tiernan Kennedy and Barry O’ Mahony.
The investment was received from some of Nubank’s executives alongside other investors including Tom Blomfield, the co-founder of Monzo, Lachy Groom, ACT Ventures, Lux Capital, Palm Drive Capital, Banana Capital and Streamlined Ventures. The round was, however, led by VC firm Costanoa Ventures.
The round comes about two years after Umba raised its seed of $2 million, and brings the total funding raised by the company to $17.5 million.
The startup claims to bring a much better range of financial products to the underserved people in the continent is not only an accessible way but also a transparent way too. Umba offers free bank accounts, inter-bak transfers, bill payments, etc., and is much like its rivals Kuda, FairMoney, etc. In other words, it offers standard financial services that digital banking platforms are expected to offer.
According to the startup’s CEO, Umba operates a credit-led. Therefore, apart from the aforementioned credit facilities, the startup provides loan services. It uses proprietary data generated by users to offer these loan offers and it makes most of its revenue from charging a monthly interest of 10 percent.
CEO Tiernan Kennedy said that “I’d like to think that we’re the cheapest in the market. The reason is we’re collecting data, making automated underwriting and retraining models every month based on customer performance to deliver credit in seconds. Also, we’re best in class in terms of lending, which allows us to offer the lowest interest rates in the markets.”
Speaking on the investment from some of Nubank’s executives, the CEO said that “The Nubank guys saw what we’re doing and recognized it is the right model for emerging markets. Credit is the hardest problem to solve and to underwrite customers at scale in multiple markets is challenging. It took us 18 months to build that. But now it’s up and running and performing.”
Umba claims to have doubled its revenues every three months since it launched and has seen more than a million downloads on Google Play Store – the major app store for android users.
The new funding will see Umba expand to three new markets – Egypt, Ghana and Kenya. These countries are seeing an increased demand for digital banking services like Umba’s. The startup will also be hiring new talents in these new markets.
Ibhadojemu Lucky Emmanuel is a graduate of Education and Economics from the University of Benin. He has a passion for tech and business and has been writing professionally for over a period of five years. He's written across various topics and segments and knew tech-business was it when he first stumbled on it. He has a great passion for music and arts, and wants to visit as many countries as he can someday.
To provide the best experiences, we use technologies like cookies to store and/or access device information. Consenting to these technologies will allow us to process data such as browsing behaviour or unique IDs on this site. Not consenting or withdrawing consent, may adversely affect certain features and functions.
Functional
Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
The technical storage or access that is used exclusively for statistical purposes.The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
