FairMoney is set to acquire Umba, another neobank in a $20 million all-stock deal. The neobank which is headquartered in Paris and already has an established presence in Nigeria will grow its customer base by the time the deal in question closes, thus expanding into many more African countries kicking things off with Kenya.
The said acquisition negotiations as per multiple reports are still very much in their early stages and neither FairMoney nor Umba has provided any detail regarding the transaction.
FairMoney is Set to Acquire Umba
The acquisition of Umba by FairMoney presents a strategic move for both fintech companies, particularly in entering and expanding within the Kenyan market. By acquiring Umba, FairMoney can bypass the three-year licensing process in Kenya and leverage Umba’s existing infrastructure to establish its presence in the country. Additionally, the combined capabilities of both fintechs are expected to enhance their offerings, potentially leading to improved financial services for customers.
Umba’s Focus On Providing Credit-Led Digital Banking Services in Emerging Markets
Umba, founded in 2018 by Tiernan Kennedy and Barry O’Mahony, originally focused on providing credit-led digital banking services in emerging markets like Nigeria and Kenya. Despite raising approximately $20 million in funding, Umba faced financial challenges, as evidenced by its revenue of $335,000 and costs of $1.54 million, as reported in its pitch deck.
What You Need To Know About FairMoney
FairMoney, co-founded in 2017 by Laurin Nabuko Hainy, Matthieu Gendreau, and Nicolas Berthozat, is an Africa-focused digital lending bank based in Nigeria. With more than $57 million in funding from investors like Tiger Global and DST, FairMoney has expanded its financial services to include debit cards, transfers, and payments. The acquisition of Umba aligns with FairMoney’s growth strategy, following its expansion into the Indian market in 2020.
What The Acquisition of Umba by FairMoney Represents
Overall, the acquisition of Umba by FairMoney represents a significant opportunity for both companies to strengthen their positions in the African fintech landscape, particularly in Kenya, while leveraging each other’s strengths and capabilities for mutual growth and success.
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