Report: FairMoney Looking to Acquire Umba, Expand in Kenya

FairMoney, a digital bank based in Lagos and headquartered in Paris, is reportedly in talks to acquire Umba, a digital bank operating in Nigeria and Kenya.

The talks involve a $20 million all-stock deal, but negotiations are in their early stages, TechCrunch reported Tuesday (Feb. 20), citing unnamed sources.

Neither FairMoney nor Umba immediately replied to PYMNTS’ request for comment.

The potential acquisition highlights FairMoney’s interest in expanding its customer base, particularly in Kenya, according to the report.

Umba, founded in San Francisco in 2018, offers a range of banking services including loans, current accounts, savings accounts, fixed deposit accounts and bill payments to customers in Nigeria and Kenya, the report said. The digital bank has secured approximately $20 million in funding from investors.

FairMoney has raised over $57 million and has been focused on expanding its presence in the FinTech space, per the report. The company, known for its lending services in Nigeria, has also ventured into the Indian market.

The potential acquisition of Umba by FairMoney could be strategic, as Umba recently obtained a microfinance license in Kenya, allowing it to offer banking services in the country, according to the report. By acquiring Umba, FairMoney could leverage its existing infrastructure and capabilities to facilitate its entry into the Kenyan market, circumventing the lengthy licensing process.

Umba secured a $15 million Series A funding round in 2022, sought additional funding and ultimately raised a $1.55 million bridge round in December 2023, the report said.

Umba was founded to help those who are underserved by legacy banks and give them complete control of their finances in a seamless way through its all-in-one digital app Umba CEO  Tiernan Kennedy told PYMNTS in an interview posted in April 2022.

“[We’re] building the core banking system from the ground up, all in-house technology, while focused on the customer and what they want to do,” Kennedy said.

The potential acquisition of Umba by FairMoney comes amid a shifting landscape in the African FinTech industry, where VC funding has become tighter and companies face challenges in meeting growth targets, according to the TechCrunch report. In this environment, more mergers and acquisitions (M&A) conversations are taking place.

This trend is evident with other recent acquisitions in the industry, such as Nigerian neobank Carbon’s acquisition of Vella Finance, the report said.