FairMoney in Negotiations to Acquire Umba in $20 Million Stock Deal
FairMoney, a digital bank based in Lagos with headquarters in Paris, is in discussions to acquire Umba, a credit-led digital bank providing payroll and financial services to customers in Nigeria and Kenya. This $20 million all-stock deal reflects FairMoney’s strategic move to expand into more countries and signals the challenges facing fintechs in Africa. Negotiations are still in the early stages, and both companies have not commented on the potential acquisition.
Umba, founded in 2018, offers banking services to customers in Nigeria and Kenya and has secured around $20 million in funding from various investors. On the other hand, FairMoney, backed by prominent investors, including Tiger Global, has been looking for avenues for expansion, including its recent foray into India.
This potential acquisition could mark FairMoney’s further expansion, leveraging Umba’s microfinance license in Kenya, and signifies a trend towards consolidation in the fintech industry in response to challenging market conditions. As the landscape of digital banks in Africa evolves, such acquisition deals are becoming increasingly common, indicating a shift in the industry’s dynamic.
The deal, if successful, would not only impact the digital banking sector in Africa but also have ramifications for the broader financial market, reflecting the changing investment landscape for startups in the region.
