NIGERIA –Nigerian digital banking company, Umba has closed US$15 million in Series A funding to accelerate growth in existing African markets and expand into new ones.
The round was led by Costanoa Ventures, with participation by Lux Capital, Palm Drive Capital, Banana Capital, Chandaria Capital, and Streamlined Ventures.
Previous investors also participated, including Lachy Groom and ACT Ventures, as well as angel investors including Monzo founder Tom Blomfield and executives from NuBank.
The new funding will allow Umba to expand its operations and product offerings, including debit cards, savings accounts, and stock trading, and prepare to launch in new markets.
The company has raised a total of US$17.5 million to date, including its seed round in late 2020, and has doubled its revenue every three months while growing its team across four locations.
“This is a great milestone for Umba, and we’re excited to bring in new partners to fuel our growth,” said Tiernan Kennedy, CEO of Umba.
“There is great potential for Umba to provide useful, accessible products and services that financially empower underserved customers.”
The startup provides a comprehensive choice of transparent and accessible financial products to those who are underserved by legacy banks across Africa, where just 43% of the population has a bank account.
It also follows Nubank’s credit-led approach, in which it first tackles consumers’ liquidity problems before upselling them on a wide range of banking products.
Umba customers can acquire loans in addition to a no-fee current account, free payments, and bill payments.
According to Kennedy, the business provides credit solutions based on proprietary data supplied by customers. The fintech startup makes the majority of its money by charging customers a monthly interest rate of 10%.
The company recently added several key hires to its team from established FinTechs, including the ex-CFO of Nigerian unicorn Interswitch, the former CTO and CAO from Calypso Technology, and senior staff from Carbon and Zynga.
The startup expansion plan is attributed to the rise of fintech has upset the institutional banking business. In a market that has high competition already, FinTech, or new inventive players, are putting a new form of competitiveness on banks.
Banks are already competing with mobile phone operators and money transfer and payment firms.