Digital bank, Umba, raises $15 million to expand across Africa

Umba, an African digital bank, announced that it raised $15 million in a Series A funding round. Investors in this fundraise include Nubank, Tom Blomfield, the co-founder of Monzo, and previous backers Lachy Groom and ACT Ventures, Lux Capital, Palm Drive Capital, Banana Capital and Streamlined Ventures.

With this fundraise, $2 million raised in 2020 and another undisclosed amount in 2019, Umba has now raised over $17 million in total.

The digital bank intends to scale its operations into new markets including Egypt, Ghana and Kenya. Umba also intends roll out debit cards, savings accounts, and stock trading in the next 18 months.

Like other digital banks like Kuda, Carbon, Umba provides free bank accounts, free payments and credit services to its customers. It generates most of its revenues from charging consumers a monthly interest of 10%.

According to the CEO, Tiernan Kennedy in a discussion with Techcrunch, the company has doubled its revenues every three months since launching 18 months ago with over 1 million installs on Google Play Store.

Kennedy acknowledged that the firm’s focus on engineering and customer experience has been key to this growth. He also said they’d be instrumental in Umba’s push to serve multiple markets, currencies and payment infrastructures.

“Typically, like a legacy bank, some startups will buy off-the-shelf banking systems and customize them for their customers. But they’re not thinking about the customer first. For us, we designed core banking systems from the ground up and can deliver a customized experience for the customer at the drop of a hat in both banking and mobile money markets,” said the chief executive.

“We can take in all that open banking data and underwrite at scale with these different fragmented payment types and data types. What that means for us, in practice, is that we’re multi-currency, we can go multi-country, we can do all different payment types. And that takes time. But then when you get your ability to move extremely fast against competitors.”