Although the acquisition talks are still in their early phases, FairMoney's intention to increase the size of its customer base by entering new markets—Kenya, where Umba operates, in particular—is indicated by this move. Additionally, it highlights the difficulties that African fintechs face in an extremely competitive global startup market: a USD 20 million all-share is nearly equal to the sum that Umba has raised from outside investors.

Founded in 2018, Umba began as a digital bank focused on loans and aimed at developing markets. It offers clients in Nigeria and Kenya financial services such loans, current accounts, savings accounts, fixed deposit accounts, and bill payment.
 

Motives behind the purchase

Well-known in Nigeria for its loan services, FairMoney has been searching for more growth opportunities. The business expanded its product line and entered India as a second market in 2020. In Nigeria, the bank's app was first released in 2018 as a digital lender. Other financial services, including debit cards, transfers, and payments, have been offered since then.

The transaction suggests that FairMoney is interested in Umba's microfinance licence, which it will acquire in 2022 by purchasing the majority of Daraja Microfinance Bank's shares. Umba is able to provide banking services in Kenya thanks to this licence.
 

In Kenya, getting a licence to operate a microfinance bank might be difficult. Kenya only has fourteen microfinance bank licences, compared to over 600 in Nigeria. Acquiring Umba would allow FairMoney to enter Kenya more quickly by avoiding the drawn-out licencing procedure that took Umba three years.

FairMoney news from the past

In March 2023, FairMoney bought PayForce, a merchant payment service under CrowdForce, for a sum estimated to be between $15–$20 million. FairMoney wanted to provide more financial services to retailers with this acquisition. The digital bank has expanded its product line to include debit accounts, cards, and peer-to-peer transfers after originally concentrating on retail clients. Conversely, PayForce provides over 10,000 companies with agency banking services, POS equipment, and other financial tools.
 

FairMoney and Oradian, a cloud-based core banking system, partnered in September 2022. With solutions specifically designed for emerging markets, Oradian provides services to over 10 million users in 13 countries. The Nigerian digital bank selected Oradian because of its capacity to leverage its "plug and play" solution with little backend investment, address market difficulties, enhance credit assessment, and spur product innovation.

In order to grow its services and develop into a user-friendly financial hub, FairMoney completed a USD 42 million Series B investment in July 2021, with Tiger Global Management leading the deal. This comes after two earlier investment rounds of EUR 1.2 million in seed finance in 2018 and EUR 10 million Series A in 2019.