Lagos-based digital bank with headquarters in Paris, FairMoney is currently in early-stage discussions to acquire Umba, a credit-focused digital bank providing financial services in Nigeria and Kenya, TechCrunch reported.
The potential $20 million all-stock deal signifies FairMoney’s interest in expanding its customer base, particularly in Kenya. However, the move also highlights the challenges faced by African fintechs in a demanding global startup market, as the proposed deal mirrors the amount Umba previously raised from external investors.
Founded in San Francisco in 2018 by Tiernan Kennedy and Barry O’Mahony, Umba operates as a credit-centric digital bank catering to emerging markets, offering services such as loans, current accounts, savings accounts, fixed deposit accounts, and bill payments in Nigeria and Kenya. With approximately $20 million in funding to date, Umba’s investors include Costanoa Ventures, Tom Blomfield (Monzo co-founder), ACT Ventures, Lux Capital, Palm Drive Capital, Banana Capital, and Streamlined Ventures.
FairMoney, backed by investors like Tiger Global, DST, and Speedinvest, has raised over $57 million, with a valuation of $400 million to $500 million following a bridge round in the previous year. Known for its lending services in Nigeria, FairMoney has been seeking avenues for expansion, including an ambitious entry into the Indian market in 2020. While the startup has diversified its product offerings, such as debit cards, transfers, and payments, it has not provided recent updates on its Indian operations since 2021. Currently, FairMoney claims to have over six million retail customers through its app.
