FairMoney, like many other Nigerian fintechs, started out in the lending business and is about completing its evolution into being a full-fledged digital bank.
Today it announced a $42 million Series B round. It was led by Tiger Global Management with existing investors like DST Partners, Flourish Ventures, Newfund, and Speedinvest participating.
The investment comes after FairMoney raised $11 million Series A two years ago and $16 million in total within its first four years.
For Tiger Global which led the round, this is its fourth investment in an African startup after iRoko (2013), Takealot (2014) and Flutterwave (2021). Notably, this is the first time the investment firm is investing in two African startups within a year. A sign of its renewed interest in the African continent after a long hiatus.
“We are excited to partner with FairMoney as they build a better financial hub for customers in Nigeria and India,” Scott Shleifer, partner at Tiger Global, said in a statement. “We were impressed by the team and the strong growth to date and look forward to supporting FairMoney as they continue to scale.”
Founded in 2017 by Laurin Hainy, Matthieu Gendreau, and Nicolas Berthozat, FairMoney started its operations in Nigeria before expanding to India last year.
From having a little over 100,000 users in its first year of operation, FairMoney has grown to have 1.3 million unique users who have made more than 6.5 million loan applications. Last year, the company disbursed a total loan volume of $93 million.
Within the short time its being in India, the company has processed more than 500,000 loan applications from over 100,000 unique users.
This year, FairMoney achieved one of its crucial goals by acquiring a microfinance bank license in Nigeria. The license allows FairMoney to operate as a financial service provider in Nigeria.
Coming off a fantastic 2020, the company says it is projecting to disburse $300 million worth of loans this year. It’ll finance this by raising bonds.
FairMoney has come a long way since it started as a credit provider, it’s ambition according to co-founder Laurin Hainy is that “by the end of the year, its customers will have a full-fledged banking experience from P2P transfers and lending to debit cards and current accounts.”
It’s also working on a number of additional services including savings, stock trading, and crypto-trading products. These are subject to regulatory approvals.
With this new funding, rather than expanding into other countries, FairMoney wants to focus and consolidate its position in Nigeria and India. While it’s not expanding further geographically, its talent pool is, with about 150 open positions.
FairMoney is not alone in its ambitions to dominate the Neobank scene in Nigeria, Kuda in March raised $25 million.
With more players coming onto the Neobank scene in Nigeria, one might get a feel that it’s a space that’s getting crowded but the fact that about 56% of Nigerian adults are unbanked hints that there’s room for many to play in this space.