Nigerian Digital Bank Fairmoney in Talks to Acquire Umba in A $20 Million All-stock Deal
Fairmoney, a Nigerian Digital bank and Instant Loan provider, is currently in talks to acquire one of the fastest-growing neobanks in Africa Umba, in a $20 Million All-stock deal.
According to sources, acquisition negotiations are still in their early stages, and neither FairMoney nor Umba has provided any details about the transaction.
The move signals FairMoney’s interest in growing its customer base by expanding into more countries. The acquisition will also enable FairMoney to expand on Umba’s existing infrastructure.
Since launching its digital lender app in 2018, FairMoney has expanded its financial services to include debit cards, transfers, and payments. The company says it has more than six million retail customers.
In 2023, FairMoney acquired PayForce, a subsidiary of Y Combinator-backed Nigerian merchant fintech CrowdForce, in a cash-and-stock deal.
FairMoney is building the leading mobile bank for emerging markets. The startup goal is to rebuild Africa’s money story by offering Tier 1 digital financial services to merchants and consumers alike. In its key market; Nigeria, FairMoney is currently the Most downloaded fintech app with over 10 million downloads.
FairMoney offers a range of digital financial products including, near-instant digital loans 24/7, investment products, savings, payments, and cards directly via its mobile app.
The startup gives 10,000 loans daily (one every 8 seconds!) in Nigeria and India, and have banking operations in Nigeria, with over 6 million users.
On the other hand, Umba is one of the fastest-growing neobanks in Africa, which offers free bank accounts and a suite of financial services including small loans to their customers all from a mobile app. Customers can spend, pay bills, get loans, and earn cashback all from their phones.
Umba launched in Nigeria in January 2021, and Kenya in April 2023, via the acquisition of an existing Microfinance bank. The digital platform offers seamless access to a wide range of banking services, including account management, payments, loans, savings, and more. It leverage technology and data-driven insights to streamline processes and make banking faster, smarter, and more convenient than ever before.
In 2020 Umba’s growth accelerated during the global pandemic. The startup then partnered with SmileID, to build a premier pan-African neobank to be a step ahead on compliance and work closely with regulators.
After securing a $15 million Series A funding round at a $60 million valuation in February 2022, Umba sought further funding last December. Ultimately, it raised a $1.55 million bridge round at a valuation of just $25 million which is in line with FairMoney’s offer.
Sources disclosed that while Umba wasn’t actively seeking a sale, it may consider FairMoney’s offer, particularly given its current financial status.
