TLG Capital invests in a neo-banking platform in Nigeria
TLG Capital announced an investment it’s made into a Paris based fintech company, FairMoney, which operates a neo-banking platform in Nigeria providing underbanked users with bill payment solutions and collateral-free lending.
The company has a microfinance bank licence from the Central Bank of Nigeria, which permits it to officially operate as a financial services provider in the country. FairMoney, like NuBank – the $30 billion behemoth, operates a credit-led strategy: offering credit via an app and subsequently offers bank accounts as a gateway to other services. In 2019, FairMoney expanded its reach into India.
In July this year, Tiger Global led a $42 million series B round for FairMoney. The company’s series A was for €10 million, two years ago, and prior to that a €1.2 million seed round, in 2018. Tiger Global joins existing investors such as DST Partners, Flourish Ventures, Newfund, and Speedinvest.
Of the company’s over 5 million users, 1.6 million are unique bank account holders. The company aspires for its customers to have a wholesome banking experience from P2P transfers and lending to debit cards and current accounts. FairMoney’s approach to underwriting credit is based on a proprietary algorithm that applies machine learning techniques to smartphone data. The average loan size is €30 and customers can grow their loan limits up to €1,000 over time by demonstrating good repayment habits. Concurrently, FairMoney is building additional services around savings and investment products depending on local regulation.
Laurin Hainy, co-founder and CEO of FairMoney said, “We are delighted to have TLG Capital join the pool of debt investors in FairMoney Nigeria as we work to build the leading neo-bank in emerging markets. TLG’s investment supports our digital banking aspirations and helps position FairMoney to grow our share of wallet while offering services to the financially excluded and underserved. Together we will strive to build a financial home to our customers.”
Saad Sheikh, principal at TLG said, “Large banks are feeling the pressure from financial ecosystem builders like FairMoney. Conventional banking in Africa, especially in Nigeria, is being disrupted rapidly and that’s where we feel FairMoney has a significant role to play. Not only is FairMoney making financial services accessible to all, it is building layers of products to retain those customers on its platform. At TLG, we are excited to work with disruptive tech players like FairMoney and expect to broaden our product access to best in class, tech enabled African enterprises.”
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