Neobanks have led the charge as regards venture capital funding for consumer fintech startups. But while they have collectively dominated the fintech space, they don’t operate a monolithic model.
There are five distinct models, and the one adopted by Nubank, the $30 billion behemoth, is the credit-led model. Neobanks operating this model start by offering credit via cards or on an app and subsequently offer bank accounts as a gateway to other services.
Nigerian fintech startup FairMoney operates this model. Today, it is announcing a $42 million Series B raise to diversify its offerings and expand to “become the financial hub for its users.”
Tiger Global Management led the round. Existing investors from the company’s previous rounds, DST Partners, Flourish Ventures, Newfund, and Speedinvest, participated. The investment comes after FairMoney raised €10 million Series A two years ago and €1.2 million seed in 2018.
Founded in 2017 by Laurin Hainy, Matthieu Gendreau, and Nicolas Berthozat, FairMoney started as an online lender that provides instant loans and bill payments to customers in Nigeria.
When CEO Hainy spoke to TechCrunch in February, the company was six months into its expansion to India. One of the highlights of that discussion was FairMoney’s impressive numbers in 2020. 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.
The company also made some progress on the India front, processing more than 500,000 loan applications from over 100,000 unique users.
So what has changed since then? For one, Hainy says FairMoney ticked one of the goals which was acquiring a microfinance bank license. The license allows FairMoney to operate as a financial service provider in Nigeria.