Nigerian fintech startup, FairMoney, has raised a $42 million Series B round.
This round was led by the US hedge fund and investment firm, Tiger Global. Existing investors that participated in the round include DST Partners, Flourish Ventures, Newfund and Speedinvest.
The investment comes after FairMoney raised €10 million Series A round two years ago and €1.2 million seed in 2018.
With an active presence in Nigeria and India, the startup plans to diversify its current offerings and expand to become the preferred financial destination for its users.
Founded in 2017 by Laurin Hainy, Matthieu Gendreau, and Nicolas Berthozat, FairMoney provides collateral-free lending services and bill payments to Nigerians.
According to Techcrunch, last year, the company disbursed a total loan volume of $93 million to over 1.3 million users who made more than 6.5 million loan applications. In 2020, the company expanded to India and was able to make some progress there processing 500,000 loan applications from over 100,000 unique users.
Laurin Hainy, CEO of Fairmoney said the company has secured a microfinance bank license from CBN. The license will allow FairMoney to operate as a financial service provider in Nigeria.
FairMoney offers loans to individuals from N1,500 to N500,000 up to six months. The company currently has 3.5 million registered users. Of this number, 1.3 million are unique bank account holders. The company says it is projecting to disburse $300 million worth of loans to them this year.
What they are saying
Loans for SMEs are becoming quite prominent as more lending platforms have begun to offer loans to the Nigerian retail sector. FairMoney has seen an opportunity here and Hainy states that the company will start servicing loans to registered SMEs in Nigeria. The company also plans to issue debit cards too.
“The ambition is that by the end of the year, the customer has the full-fledged 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,” says Hainy.
African fintech startups have attracted a lot of capital this year from both local and foreign investors. For Tiger Global, the lead investor in this round, it is the first time the U.S. hedge fund is investing in two African startups in a year after backing Flutterwave in March.
This new funding round will be used to diversify its current offerings and expand to “become the financial hub for its users.”
Scott Shleifer, a partner at Tiger Global, said, “We are excited to partner with FairMoney as they build a better financial hub for customers in Nigeria and India. We were impressed by the team and the strong growth to date and look forward to supporting FairMoney as they continue to scale.”