There is no shortage of digital banks in Nigeria. As the region continues to experience rapid growth in mobile usage and the corresponding growing young population, these fintechs think this is the right time to provide financial services to every market category, from the banked to the unbanked.

We have covered a number of these platforms in the past. Their customers essentially overlap because their pitch is to provide financial services to the underserved market. Umba, a digital banking platform in Lagos, Nigeria, has raised $15 million in Series A funding. Two years ago, the fintech raised a seed round of $2 million.

Umba said it brings a wide range of transparent and accessible financial products to those underserved by legacy banks across Africa.

It has free bank accounts, interbank transfers, peer-to-peer transfers and bill payments. These are standard features of digital banks in Africa, whether they are deposit-first like Kuda or credit-first like FairMoney or Carbon.

Tiernan Kennedy, the company's CEO, said on a call that Umba operates the credit-led model pioneered by Nubank, where it first solved the problem of liquidity for customers before upselling them on a broad spectrum of banking products.

In addition to getting a no-fee current account, free payments and bill payments, Umba users can access loans. Kennedy said the company uses proprietary data to offer credit products. Most of the company's revenues are generated by charging consumers a monthly interest of 10%.

I would like to think that we are the cheapest in the market. Kennedy said that the company is collecting data and making models every month based on customer performance to deliver credit in seconds.

As part of the Series A round, Umba convinced a couple of Nubank executives to wire some checks.

The Nubank guys saw what we were doing and recognized it was the right model for emerging markets. Credit is the most difficult problem to solve and it's difficult to get credit for customers in multiple markets. It took 18 months to build that. Kennedy said that it is up and running and performing.

Tom Blomfield, the co- founder of Monzo, is one of the investors. Costanoa Venture led the round, with new investors such as Palm Drive Capital, Banana Capital, and Streamlined Venture participating. The company has raised over 15 million dollars.

Umba, a digital bank for emerging markets, raises $2M Seed funding to expand across Africa

Umba has been in operation for a couple of years. Kennedy didn't reveal hard numbers when asked to share financials, only saying that the company has doubled its revenues every three months since launching 18 months ago.

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

Like a legacy bank, some startup will buy off-the-shelf banking systems and modify them for their customers. They aren't thinking about the customer first. The chief executive said that they designed core banking systems from the ground up and can deliver a tailored experience for the customer at the drop of a hat in both banking and mobile money markets.

We can take in all the open banking data at scale with these different payment types. In practice, that means that we can go multi-country, do all different payment types, and be multi-currency. It takes time. When you have the ability to move quickly against your competitors.

It is difficult to establish a digital banking experience in African markets between banks and mobile money operators. Kennedy's claims are yet to be realized because Umba has only one operation in Nigeria. It is still early to say if the company can provide financial services across the continent.

The new funding will allow the company to test this out as it prepares to launch in new markets, including Egypt, Ghana and Kenya, where mobile money is prominent.

Kennedy led the engineering team at Canary and was the CTO of PearUp. Mahony was the former head of operations for Tola Mobile, a U.K. fintech with operations in Uganda.

The ex-CFO of Interswitch and senior staff from Zynga are some of the key hires made by the founders.

In the next 18 months, Umba will roll out debit cards, savings accounts, and stock trading.

Kennedy said that the next step is savings and investments, which means hiring up staff in three new markets.

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