Nigeria-based fintech startup FairMoney, on Monday, raised $42 million in a Series B funding round. The startup plans to use the fund for to consolidate its position in its Nigerian and Indian markets, and aims at becoming a financial hub for its customers.
FairMoney was founded in 2017 by Laurin Hainy, Matthieu Gendreau, and Nicolas Berthozat, and began as a digital platform that provided instant loans and a gateway for bill payments for users in Nigeria.
The startup had its Series A funding round about two years ago and raised €10 million. It raised €1.2 million in its 2018 seed round. The Series B round was led by Tiger Global Management and existing investors from previous rounds like SpeedInvest, DST Partners, NewFund and Flourish Ventures participated.
According to the startup’s CEO – Laurin Hainy while speaking with Techcrunch, FairMoney was already six months into its expansion to India. The CEO also mentioned that the company had recorded impressive figures in 2020 – its total loan disbursement volume ran into $93 million, and 1.3 million users out f 6.5 million who made loan applications benefitted. The company has also recorded impressive milestone in its new Indian market. It processed over 500,000 loan applications from more than 100,000 different users.
Another impressive milestone that the company recently attained was acquiring its microfinance bank license. According to the company’s CEO, this has been one of the top goals on the company’s bucket list. The license that the startup acquired gives it the permission to operate as a financial service provider in Nigeria. “We have received our MFB banking license which now enables us to open current accounts for our users, we’re doing that on quite a big scale. We opened accounts for our repeated and new customers, which I think is quite a unique company strategy because we don’t need to burn million of dollars on customer acquisition cost on users like other competitors. I think all of that has enabled us to become sort of the largest digital bank in Nigeria”, the company’s CEO said to Techcrunch.
FairMoney plans on disbursing $300 million worth of loans to its users this year and plans on financing it by raising bonds. The startup is quite a household name providing SMEs and individuals with loans ranging from $3 or N1,500 to $1,000 or N500,000. The company is leveraging on the inability of individuals and SMEs to access loans from commercial banks, and is proving reliant and friendly credit options for this category of people and businesses.
Speaking about the goals the company plans to achieve by the year’s end, the CEO said that “the ambition is that by the end of the year, the customer has the full0fledged banking experience from P2P transfers and lending to debit cards and current accounts. In addition to that, we are working on a number of additional services from savings products, stock trading and crypto-trading products potentially depending on where regulation is heading”. It is pertinent to know that cryptocurrency is, however, banned in Nigeria.
Laurin Hainy mentioned that unlike other startups that push completely for expansion after its Series B round, FairMoney is looking to consolidate its position in Nigeria and India, and is not considering expansion to other markets yet. She described the recently completed Series B round as a focus round for the company.
“We feel that with India and Nigeria, we have tons of work to do and tons of problems to solve. We are doubling down on the Nigerian opportunity, which is building out more banking services and becoming one of the commercial banks in the country. And then India by building a large credit book there”.
This year alone Nigerian, and extensively African startups, have received quite some attention and attained some impressive milestones. Payhippo, another digital lending platform recently raised $1 million in its pre-seed round and plans to provide funding for more African SMEs.