Umba Raises $2M Seed Funding to Expand in Africa | Fintech News

Umba, a fintech company focused on providing banking services to developing economies, with an initial focus on the African continent, has successfully raised $2 million in a seed funding round. The investment was led by a group of new backers, including Lachy Groom, formerly the Head of Issuing at Stripe, alongside Ludlow Ventures, Frontline Ventures, and Act Venture Capital.

Currently serving customers in Kenya and Nigeria, Umba presents a modern, digital alternative to conventional banking options available in Africa. The company’s mobile application provides users with a no-fee checking account, instant and cost-free peer-to-peer transfers, access to credit, deposit accounts, bill payment capabilities, and cashback rewards. This offering stands in stark contrast to the often substantial fees associated with traditional banking services throughout African nations.

The service is presently accessible within Kenya and Nigeria, countries collectively home to a population exceeding 250 million individuals.

Umba’s competitive landscape includes companies like Kudao, Carbon, Eversend, as well as traditional “cash or informal” financial practices.

Tiernan Kennedy, CEO of Umba, explained: “We intentionally designed our platform from the beginning to accommodate various markets, currencies, and payment systems. This adaptability is crucial, as it’s considerably more challenging to modify systems later on. For instance, Nigeria exhibits high rates of bank and debit card usage, so Umba is thoroughly connected to these payment methods. Conversely, in Kenya and East Africa, mobile money is prevalent, and our platform is similarly well-integrated with those services.”

Brett deMarrais, a partner at Ludlow Ventures, commented: “Umba represents our first investment in the African market, and we were eager to be involved. The Umba team has developed a superior service that lowers the expenses associated with banking and expands financial inclusion. The shift away from physical bank branches was already happening, and it has gained momentum this year. It’s evident that the African market is evolving rapidly, and we are witnessing a particularly dynamic period.”

This announcement follows recent significant activity in the African fintech space, including Stripe’s $200 million acquisition of Nigerian payment platform Paystack, as well as the acquisitions of DPO Group for $288 million and Sendwave for $500 million, demonstrating a thriving environment characterized by record-breaking venture capital investments and acquisitions.