Umba, an Irish fintech startup that serves micro-finance loans to markets across Africa, just raised a small seed round backed by Frontline Ventures and ACT Venture Capital, according to the Irish Times. The size of the round was not disclosed.
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While this deal would usually fly under our radar due to the lack of financial disclosure, Umba is the latest confirmation of a trend we’ve seen bubbling up: companies trying to tackle the issue of mobile payments in Africa. Tiernan Kennedy, co-founder of Umba, told the Irish Times that “traditional banking doesn’t work in developing markets.” He said that factors like poor transportation options, the lack of physical banks, and low average incomes are all “contributory factors to less than 40 per cent of the population having bank accounts.”
While Ireland attempts to cash in on this weakness, it’s important to note that over 200 startups within Africa are making aggressive plays at streamlining e-commerce, hailing from countries like Ghana, Nigeria, Rwanda, and Kenya, according to Crunchbase data.
Take Fawry, an Egyptian electronic payment and services platform that has raised $1 billion in funding. It is reportedly eyeing an IPO next year, Menabytes said. Capetown’s Jumo, a mobile money marketplace, has raised $91.7 million from investors like Goldman Sachs and Mastercard, according to Crunchbase data.
These startups are going against Kenya’s massive M-Pesa, a mobile payment platform that launched in 2007, and has 30 million users across 10 countries, reports CNN. Companies rising to surpass this giant tend to define themselves as tackling “emerging markets.” At least one, Paga, founded in 2012, is making moves: it processed 57 million transactions worth $3.6 billion, it told TechCrunch.
Small news like this helps big trends get on our radar (especially when it’s not in our backyard). We’ll keep watching how companies in and out of the continent try to tackle Africa’s many countries and their e-commerce issues, and what startup cracks the code.
Editor’s note: This article has been updated to reflect a correct spelling of Fawry.
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