FairMoney Moves to Acquire Umba, Strengthening its Foothold in African Fintech

Ikenna ChurchillFebruary 21, 20241 Mins read900

FairMoney, a digital bank headquartered in Paris with roots in Lagos, is reportedly in talks to acquire Umba, a credit-led digital bank operating in Nigeria and Kenya, in a $20 million all-stock transaction, according to sources familiar with the intended purchase.

This potential deal signifies FairMoney’s strategic move to expand its customer base into more countries, particularly Kenya, amid the challenging landscape for fintech startups in Africa. Umba, founded in 2018 in San Francisco, offers a range of banking services to customers in Nigeria and Kenya, having secured approximately $20 million in funding from investors such as Costanoa Ventures and Monzo, co-founder Tom Blomfield.

FairMoney, backed by investors like Tiger Global and DST, has raised over $57 million and aims to broaden its product offerings and geographic reach. The potential acquisition of Umba could provide FairMoney with valuable assets, including Umba’s microfinance license in Kenya, facilitating its entry into the Kenyan market.

While Umba wasn’t actively seeking a sale, FairMoney’s offer aligns with its current financial standing and could present an attractive opportunity. Amid tightening VC funding and challenging market conditions, M&A activities in the fintech sector, including digital banks, are becoming more prevalent, with companies seeking strategic partnerships to navigate uncertainties and drive growth.