The Kenya-based digital bank for emerging markets Umba has announced a US$2 million seed funding round to help it expand product capabilities beyond the two African countries where it is presently active: Kenya and Nigeria. Umba which offers a safe, transparent and accessible digital financial service alternative to legacy African banks believes it has the right platform and product to reach more countries across Africa. The full service digital banking app is bringing the next generation of financial services to the underserved and rapidly emerging market that exists in Africa. Investors in its US$2 million seed round include Lachy Groom, ex-head of issuing at Stripe, as well as Ludlow Ventures, Frontline Ventures and Act Venture Capital. Umba will use the investment to scale product offerings such as peer-to-peer payments, debit cards, savings and lending to meet the needs of the Nigerian and Kenyan markets.
The startup offers its services through a mobile app where customers have access to a free checking account, free instant peer-to-peer money transfers, lending, deposits, BillPay and cashback. This eliminates the high cost barriers and inconvenient payment processing methods found across traditional banking institutions in African countries that make basic banking inaccessible for millions of people. “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. Having a platform that can service those diverse sets of needs is a key reason why Umba can scale up this business fast,” said Umba chief executive officer (CEO) Tiernan Kennedy.
Read also:Seven Online Banking Security Tips for Africans
Ludlow Ventures partner Brett DeMarrais highlighted the increase in venture activity in Africa and the opportunities it brought. “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 democratises access. The move away from physical branch infrastructure was already underway and it has accelerated this year,” he said.
Read also:Nigerian Fintech Startup OnePipe Secures $950k In Pre-seed Round
“As an investor it’s also very encouraging to see the investment activity that has also increased – from the Jumia IPO to the Visa investment in Interswitch to the acquisitions this year of Paystack, DPO and Sendwave. It’s clear the African market is maturing and that we’re entering a very interesting phase.”
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry