Digital bank Umba raises $15m, led by Costanoa Ventures
Umba, the digital bank for emerging markets, announced a $15 million series A round to continue their rapid growth and expand into new African markets.
The round was led by Costanoa Ventures and joined by Lux Capital, Palm Drive Capital, Banana Capital, Chandaria Capital and Streamlined Ventures as well as previous investors including Lachy Groom and ACT Ventures. The company also received new angel investment from neobanking pioneers such as Monzo founder Tom Blomfield and executives from NuBank. Investors are increasingly looking to Africa for start-ups with huge potential. The company has raised a total of $17.5 million to date and has experienced rapid growth since its seed round in late 2020, doubling revenue every three months as well as growing its team across four locations.
Umba brings a wide range of transparent and accessible financial products to those underserved by legacy banks across Africa.
New funding will allow Umba to expand its current operations and product offerings, as well as prepare to launch in new markets. Over the next 12 months Umba is set to roll out new products including debit cards, savings accounts and stock trading to enable its customers to take control of their financial lives.
Umba CEO, Tiernan Kennedy commented, “This is a great milestone for Umba, and we’re excited to bring in new partners to fuel our growth. Mark Selcow at Costanoa Ventures is a seasoned operator and investor who brings extensive company building experience to our board. There is great potential for Umba to provide useful, accessible products and services that financially empower underserved customers. There’s a generational shift happening in banking and customers stand to benefit massively from the move to fully digital services.”
Legacy African banks are costly, inaccessible and inconvenient. This has contributed to huge portions of the population left unbanked – only 43% of Sub-Saharan Africa’s population are account holders at financial institutions.
As these regions have experienced rapid growth of mobile usage over the past 18 months, the growing populations across Africa should have access to the best financial services and tools at their fingertips. While smartphone adoption has grown to 50%, most mobile money applications in these regions only allow basic services. Umba overcomes this by providing accessibility to those who previously had limited banking options. It offers customers an unparalleled, full mobile banking application, opening up a range of new financial services that are transparent, low fee and informed by analytics to intelligently service customers. Features include free bank accounts, interbank transfers, peer-to-peer money transfers, bill payments and credit products. Umba plans to launch virtual debit cards and savings accounts soon- without needing to levy punitive fees.
“We’re extremely excited to lead this round and join the Umba team on their journey. This team consistently executes, and it shows in their 2021 growth. The opportunity to build the largest digital bank in Africa is one we didn’t want to miss. This market shows no sign of slowing any time soon,” said Mark Selcow of Costanoa Ventures.
Umba has recently added several key hires to its team from established fintech companies.
Executives include the ex-CFO of Interswitch (Nigeria’s first unicorn), the CTO and CAO from Calypso Technology, and senior staff from Carbon and Zynga. They will continue to hire top talent across the company to support its strong growth throughout the year.
“This investment allows us to continue to hire the best people across banking and fintech to build something new from the ground up, centered around our customers’ everyday needs. Over the past year we’ve experienced rapid growth in our customer base and payment volume which validates just how much customer demand is in the market for our product,” expressed CFO and co-founder, Barry O’Mahony.
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