Digital bank Umba raises $15M, plans to expand into three new African markets

Digital bank Umba

Digital bank Umba

There’s no shortage of digital banks in Nigeria and, in general, in Africa. As the region continues to experience rapid growth in mobile usage and the corresponding growing young population, these fintechs think this is the right time to provide financial services to every market category, from the banked to the unbanked.

We’ve covered a host of these platforms in the past. Their overarching pitch is to provide financial services to the underserved market, so their customers essentially overlap. In the latest development, Umba, a digital banking platform operating in Lagos, Nigeria, has raised $15 million in Series A funding. The news comes almost two years since the fintech raised a seed round of $2 million.

Umba said it brings a wide range of transparent and accessible financial products to those underserved by legacy banks across Africa — only 43% of the region’s population are account holders at financial institutions.

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Its features include free bank accounts, interbank transfers, peer-to-peer transfers and bill payments. These are standard features digital banks in Africa provide, whether they’re deposit-first like Kuda, credit-first such as FairMoney or Carbon, or both like Fintech Farm.

The company’s CEO, Tiernan Kennedy, told TechCrunch on a call that Umba operates the credit-led model pioneered by Nubank, where it first solves the problem of liquidity for customers before upselling them on a broad spectrum of banking products.

So, in addition to getting a no-fee current account, free payments, and bill payments, Umba users can access loans. Kennedy said the company uses proprietary data generated by customers to offer credit products. The fintech company generates most of its revenues from charging consumers a monthly interest of 10%.

Umba has been in operation for about two years now. Kennedy didn’t divulge hard numbers when asked to share some financials, only saying that the company has doubled its revenues every three months since launching 18 months ago with over 1 million installs on Google Play Store.

Kennedy acknowledged that the firm’s focus on engineering and customer experience has been key to this growth. He also said they’d be instrumental in Umba’s push to serve multiple markets, currencies and payment infrastructures.


Digital bank Umba

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