Nigerian digital banking startup, Kuda, has a new competitor on the market, the Irish founded fintech startup Umba, which has announced that it has raised $2 million in seed funding round from new investors including Lachy Groom, ex-Head of Issuing at Stripe; Ludlow Ventures; Frontline Ventures and Act Venture Capital. Umba plans to use the investment to enter its second market, Nigeria, as well as continue to grow its team of passionate people from all over the world.
“When we started Umba we set out to provide an essential service for the millions of people who are not getting the banking services they need,” says –Tiernan Kennedy, CEO at Umba in a press release “With this latest investment, we can accelerate our progress and get our product into the hands of more customers.”
Why The Investors Invested
On why the VC invested, 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.”
Investment in UMBA is not a surprise. 2020 remains the best year so far for startups within the African fintech ecosystem. Recently, payments company Stripe, acquiredNigerian payment service startup Paystack in a deal reported to be more than $200 million. Apart from Paystack’s acquisition, DPO Group was also acquired for $288 million; and Sendwave for $500 million. This shows a booming ecosystem shattering records in venture financing rounds as well as acquisitions.
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Read also: Nigerian Fintech Startup OnePipe Secures $950k In Pre-seed Round
A Look At What Umba Does
Founded in 2018 by Tiernan Kennedy, and 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.
“From the outset we built our platform to serve multiple markets, currencies and payment infrastructures,” Umba’s CEO Tiernan Kennedy said. “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.”
Umba competes with Kuda, Carbon, Eversend and “Chip or cash” methods.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer