Lagos-based Digital Banking Platform, Umba, Raises $15 Million To Expand Into New Markets

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An African digital banking platform based in Lagos has raised $15 million in Series A funding.

The platform, Umba, was founded by Barry O’Mahony in 2018. Investors that participated in this funding round include Lux Capital, Palm Drive Capital, co-founder of Monzo, Tom Blomfield, Lachy Groom, and ACT Ventures. The round was led by VC firm Costanoa Ventures.

The platform raised $2 million sometime in 2020. Umba operates by having a wide range of accessible and transparent financial products and brings them to those underserved by legacy banks across Africa.

Umba’s features consist of peer-to-peer transfers, bank accounts, interbank transfers and bill payments. These features are similar to Kuda, Fintech Farm, Carbon and FairMoney. On a call with TechCrunch, Umba’s CEO, Tieman Kennedy, said that the company operates by the credit model that is pioneered by Nubank, where it solves the problem of liquidity for customers before they upsell them on a broad spectrum of banking products.

Apart from access to bill payments, a no-free account and free payments, customers can also access loans. It is made possible by Umba as they use proprietary data that is generated by the customers to offer credit products.

The company has been operating for two years and the raised funds will help them to launch and expand in new markets including Kenya, Egypt and Ghana where mobile money is prominent. Umba generates the majority of its revenue by charging consumers a monthly interest rate of 10%.

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