Nigeria's FairMoney is reportedly in talks to buy Umba in $20m deal
TLDR
- FairMoney in discussions to acquire Umba, a credit-focused digital bank in Nigeria and Kenya
- Potential $20 million all-stock deal highlights FairMoney's expansion into new markets
- Acquisition under early negotiations, both companies yet to confirm details
FairMoney, a digital bank with its base in Lagos and headquarters in Paris, is reportedly in discussions to acquire Umba, a credit-focused digital bank that offers payroll and financial services to customers in Nigeria and Kenya. Sources familiar with the matter revealed to TechCrunch that the potential deal is valued at $20 million and would involve an all-stock transaction.
The proposed acquisition highlights FairMoney's strategic ambition to expand its customer base by venturing into additional countries, particularly Kenya. However, it also underscores the challenges confronting fintech companies in Africa amid the broader market conditions for startups globally. Notably, a $20 million all-stock deal would approximate the amount Umba previously raised from external investors.
While negotiations for the acquisition are still in the early stages, according to the sources, both FairMoney and Umba have not provided comments on the matter, citing the confidentiality of the details.
Key Takeaways
If finalized, the acquisition would mark the latest in a series of acquisitions by Nigerian startups in 2024. FairMoney, renowned for its lending services in Nigeria, has been actively seeking avenues for expansion. While the startup ventured into India as its second market in 2020, subsequent updates about the business's performance have been scarce since a momentum update in 2021. FairMoney has also been diversifying its product offerings. Initially launched as a digital lender in Nigeria six years ago, the startup's eponymous app has evolved to encompass various financial services, including debit cards, transfers, and payments. With over six million retail customers, FairMoney has steadily broadened its reach. In the past, FairMoney has pursued acquisitions to enhance its market position. Notably, the startup acquired PayForce, a sub-brand of YC-backed Nigerian merchant payment service CrowdForce, in a cash-and-stock deal valued at $15-20 million.
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