Umba, a digital bank for emerging markets, raises $2M Seed funding to expand across Africa
Umba, a digital bank for emerging markets and aiming first at Africa, 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 Capital.
Currently operating in Kenya and Nigeria, Umba offers a digital financial service alternative to legacy African banks. Its mobile app gives customers a free checking account, free instant peer-to-peer money transfers, lending, deposits, BillPay and cash back. This is in contrast to the generally high-cost barriers found among traditional banking institutions in African countries.
Right now it’s 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 harder to upgrade your systems at a later date. For example, 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 is dominant so 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 team at Umba have an excellent service that drives down the cost of banking for their customers and democratizes access. The move away 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 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.
SOURCE: YAHOO FINANCE