Umba, an emerging market digital bank initially targeting Africa, has received a $ 2 million seed funding round from new investors including Lachy Groom, Ex-Head of Issuing at Stripe. Ludlow Ventures; Frontline Ventures and Act Venture.
Currently working in Kenya and Nigeria, Umba offers a digital financial service alternative to old African banks. The mobile app offers customers a free checking account, free peer-to-peer money transfers, loans, deposits, BillPay and Cashback. This is in contrast to the generally high cost barriers that can be found at traditional banking institutions in African countries.
It is currently available in Kenya and Nigeria, where a total of over a quarter of a billion people live.
Umba competes with the Kudao, Carbon, Eversend and “Chip or Cash” methods.
Tiernan Kennedy, CEO of Umba, said, “From the beginning we built our platform to serve multiple markets, currencies and payment infrastructures. This flexibility is an extremely important consideration as it is much more difficult to upgrade your systems at a later time. For example, the penetration of banks and debit cards is high in Nigeria, so Umba is deeply integrated into these payment methods, while in Kenya and East Africa mobile money dominates, so our platform is also tightly integrated with these services. "
Ludlow Ventures Brett DeMarrais, Partner, said, “Umba is the first investment we have made in the African market and we were thrilled to be part of it. The Umba team has an excellent service that lowers banking costs for its customers and democratizes access. The move away from physical branch office infrastructure was already underway and has accelerated this year. It is clear that the African market is maturing and we are entering a very interesting phase. "
The news comes shortly after Stripe's Acquisition of Nigerian payment services startup Paystack for US $ 200 million and acquisition of DPO Group for US $ 288 million and Sendwave for US $ 500 million, demonstrating a booming ecosystem breaking records in venture rounds and acquisitions.