FairMoney in $20M All-Stock Talks to Acquire Umba, Eyes Kenyan Expansion
FairMoney, a Lagos-based digital bank headquartered in Paris, is in talks to acquire Umba, a Nigeria- and Kenya-based credit-led digital bank, in an all-stock deal valued at $20 million, according to TechCrunch sources.
The move signals FairMoney’s push to expand its customer base and enter new African markets, particularly Kenya. The deal’s value roughly matches the total capital Umba raised from investors, reflecting the tighter funding climate for African fintechs.
Discussions are still in the early stages, and both companies have declined to comment.
Umba’s Background and Investors
Founded in 2018 by Tiernan Kennedy and Barry O’Mahony, Umba offers loans, current and savings accounts, fixed deposits, and bill payments in Nigeria and Kenya. The San Francisco-founded startup has raised about $20 million from investors such as Costanoa Ventures, Monzo co-founder Tom Blomfield, Lachy Groom, and Lux Capital.
Umba obtained a Kenyan microfinance license in 2022 by acquiring a majority stake in Daraja Microfinance Bank— one of just 14 licenses in the country. This makes the company an attractive target for FairMoney, which could bypass Kenya’s lengthy licensing process through acquisition.
FairMoney’s Growth Strategy
FairMoney, backed by Tiger Global, DST Global Partners, and Speedinvest, has raised over $57 million to date. Valued between $400 million and $500 million, the company has more than six million customers.
Originally a digital lender, FairMoney has evolved into a full-service neobank, offering debit cards, transfers, and payments. The company entered India in 2020 but has since focused on expanding across Africa.
FairMoney’s previous acquisitions include PayForce, a merchant payments platform it bought from CrowdForce in a $15–20 million cash-and-stock deal. CEO Laurin Hainy said the move blurred the line between retail and merchant banking, unlocking new synergies.
Why Umba Appeals to FairMoney
Beyond Umba’s user base, FairMoney may be eyeing regulatory advantages and infrastructure. Umba’s recent pivot to merchant financing and business banking could align well with FairMoney’s broader retail ambitions.
Financially, Umba reported $335,000 in revenue against $1.54 million in expenses between January and June 2023, highlighting operational strain. After a $15 million Series A in 2022 at a $60 million valuation, Umba raised just $1.55 million last December at a $25 million valuation—close to FairMoney’s offer.
African Fintech Consolidation
African digital banks once drew massive venture capital funding, but slowing growth and tight VC markets have triggered a wave of mergers and acquisitions.
This month, Carbon acquired Vella Finance, an SME-focused neobank. If completed, FairMoney’s purchase of Umba would be its second acquisition in two years, signaling ongoing consolidation in Africa’s fintech sector.
