Umba, an Irish founded fintech and digital bank for emerging markets has raised $2 million in seed funding as it seeks to expand its operations in Africa. It currently operates in Kenya and Nigeria.
Umba as a digital bank, offers a transparent and accessible digital financial service alternative to legacy African banks, an underserved market in the region. They have products such as current accounts, instant peer-to-peer payments, bill payments and lending through a mobile app.
“From the outset we built our platform to serve multiple markets, currencies and payment infrastructure. This flexibility is an extremely important consideration as it’s much harder to upgrade your systems at a later date,” said Umba’s chief executive, Tiernan Kennedy.
Tierman Kennedy continues, “For example bank and debit card penetration is high in Nigeria, so Umba is deeply integrated into those payment methods, while across Kenya and East Africa mobile money is dominant so our platform is tightly integrated with those services, too.”
Kenya and Nigeria are the two top markets for venture investment in Africa, with more than 250 million people combined. “We are testing what’s working. We have multiple products – a free bank account with no fees, that is compelling already; then we have things like bill pay with cashback, and then we are working on things like saving accounts with the ability to put aside money in multiple pots.” – Tierman Kennedy.
This is the first investment in the African market for Ludlow Ventures.
“The team at Umba have an excellent service that drives down the cost of banking for their customers and democratises access. The move away from physical branch infrastructure was already underway and it has accelerated this year.” – said Ludlow Ventures partner Brett DeMarrais.
“As an investor, it’s also very encouraging to see the investment activity that has also increased…It’s clear the African market is maturing and that we’re entering a very interesting phase.” he added.
Umba, a company founded by Barry O’Mahony and co-founder Tiernan Kennedy, currently employs 20 people. They hope for further growth in the coming months as it expands its business in Africa.
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OKO: Insurtech Startup Raises US$1.2M to bring Innovative Insurance to Smallholder Farmers Across Africa
Insurtech start-up, OKO, that provides inclusive agricultural insurance to secure farmers’ income across Africa, has closed a seed investment of $1.2 million. The round was led by Newfund and ResiliAnce. Mercy Corps Venture, Techstars, ImpactAssets and RaSa also participated in the round.
The startup which currently operates in Mali and Uganda uses satellite data and mobile payments to create automated insurance products for farmers whose fields are affected adversely by weather events — primarily droughts and floods. With the new funding, OKO aims to strengthen its presence in Mali and Uganda and expand its offerings to more African markets, starting with Ivory Coast.
According to the founder of OKO, Simon Schwall, in a press statement said,
Simon also said they were using technology to solve this issue and secure the income of those farmers.
The company already has approximately 7,000 paying customers in Mali and compensated more than 1,000 farmers last year, who were affected by floods. OKO’s customers typically grow maize, cotton, sesame or millet. It also works with agro-industries to help them with their sustainability goals and secure their relationships with suppliers. Successful pilots were completed with ABInBev and Touton in Uganda.
This convinced Augustin Sayer, partner at Newfund, to support OKO:
“We believe recent advancement in iOT and data availability will lead to the rise of parametric insurance in Africa for the benefit of the local populations. Simon and his team have built solid bases in Mali from which OKO can now expand in new countries and offer new insurance products.”
OKO takes pride in being the most inclusive crop insurance available. All farmers need to connect to OKO is a phone (no smartphone required): they can dial a short code to obtain more information and pay through mobile money services. To achieve this level of accessibility, the company partners with mobile operators.
OKO, for Aisha Touré, the CEO of Orange Money in Mali, has taken full benefit of the Orange Money platform to provide a service that is both innovative and inclusive.
Daniel Block from Mercy Corps Ventures added,
“While other micro-insurance for farmers exist, we were impressed by OKO’s ability to partner with a pan-African operator like Orange and establish a direct consumer link, which allows for an exciting opportunity to drive deeper user engagement and expand to a suite of insurance products for rural farmers in the future.”
The service offered by OKO is supported by regulators and has won both the Fintech Showcase Award by the Alliance for Financial Inclusion, representing financial regulators of emerging countries, and the SME award from ITU, the telecommunication governing body.
When asked about the next challenges for OKO, Simon Schwall’s answer is clear:
“We need to find more partners who can bring our product to farmers, be it NGOs, agro-industrial players, mobile operators or governmental programmes. We proved that our solution is working and answers a strong need. Now we need to scale”
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