Nigerian micro-lending Fintech startup, FairMoney, announced that it has raised $42 million in a series B round led by an American investment firm, Tiger Global. Other participants in the round include DST Partners, Flourish Ventures, Newfund, and Speedinvest. FairMoney intends to this raise to diversify its offerings and expand to “become the financial hub for its users.”
In 2019, the company closed a 10 million Euro Series A round of investment led by Flourish, a venture of The Omidyar Group, the partners of DST Global, and existing seed investors Newfund, Speedinvest, and Le Studio VC.
Launched in 2017 by by Laurin Hainy, Matthieu Gendreau, and Nicolas Berthozat, FairMoney is a mobile bank for emerging markets. It started as a mobile app that uses alternative smartphone data to underwrite microcredit in Nigeria.
The company stated that it has recently acquired a micro-finance license which allows the company to operate as a financial service provider in Nigeria.
According to Laurin Hainy in a discussion with Techcrunch, “this micro-finance license now enables us to open current accounts for our users, and we’re doing that on quite a big scale.”
“We opened accounts for our repeated and new customers, which I think is quite a unique company strategy because we don’t need to burn millions of dollars of customer acquisition cost on users like other competitors. I think all of that has enabled us to become sort of the largest digital bank in Nigeria,” he added.
The company claims it currently has 3.5 million registered users, out of which, 1.3 million are unique bank account holders.
The company says it is projecting to disburse $300 million worth of loans to them this year, growing from $93 million to over 1.3 million users in 2020. It expects to finance this by raising bonds. FairMoney’s loan book is grown by its capital markets activity and has convinced some investment banks to invest a substantial amount in its unlisted bond.
“The ambition is that by the end of the year, the customer has the full-fledged banking experience from P2P transfers and lending to debit cards and current accounts. In addition to that, we are working on a number of additional services from savings products, stock trading, and crypto-trading products potentially depending on where regulation is heading,” Hainy continued.
