Across Africa, there is a wide range of commercial banks, as well as other financial institutions serving the populace. However, according to a 2020 report by Statista, only about 35% of the population of Africa have access to banking services in 2017.
The report shows a growth in the number of people with access to banking services in Africa, from 23% in 2012, and it is expected to grow to 48% in 2022. This shows that about half of African population is unable to access financial services.
Banking on the quest to bridge this gap, and make financial services available to more people, Lagos-based digital bank, Umba, has raised $15 million in its series A funding round.
The Series A funding round was led by Costanoa Ventures, with participations from Tom Blomfield (co-founder of Monzo). The round also saw returning investors like Lachy Groom, and ACT Ventures participating, while new investors such as Lux Capital, Palm Drive Capital, Banana Capital and Streamlined Ventures also made inputs.
With the funds raised, Umba would be expanding its coverage in Africa to new markets like Egypt, Ghana, and Kenya. The startup will also upscale its infrastructure, and test out new offerings.
Umba provides standard digital bank service like interbank cash transfer, bill payment, free bank account, and peer-to-peer fund transfer. Umba also provides loan facilities to its customers, using proprietary data generated by customers to offer credit products.
“I’d like to think that we’re the cheapest in the market. The reason is we’re collecting data, making automated underwriting and retraining models every month based on customer performance to deliver credit in seconds. Also, we’re best in class in terms of lending, which allows us to offer the lowest interest rates in the markets,” CEO, Tiernan Kennedy, told TechCrunch.
Umba was founded in 2018 by the duo of Kennedy, and Barry O’Mahony (who serves as CFO).
Prior to founding Umba, Kennedy had worked as the CTO of PearUp – a dating app – as well as leading the engineering team at IoT firm Canary. Co-founder, O’Mahony, was the former head of operations for Tola Mobile, a U.K. fintech with operations in Uganda, Rwanda, Mozambique, Tanzania and Kenya.
In 2020, Umba raised $2 million in its seed funding round.