Yesterday, Fingo, a YC-backed Kenyan fintech, launched its neobank, which it developed in partnership with Pan-African financial institution Ecobank Kenya. The Ecobank subsidiary unveiled the neobank, the first of its kind in the East African country, according to the pair, in a event with the president of the country, William Ruto, pending.
It’s taken Fingo a while to get here since CEO Kiiru Muhoya and his co-founders James da Costa, Ian Njuguna and Gitari Tirima founded the Kenyan outfit in January 2021 to provide financial services that appeal to a burgeoning African youth population that happens to be the youngest in the world, but the most financially marginalized.
For young adults in Africa, opening an account can take several hours to days, with multiple face-to-face interactions and requirements to bring physical paper documents. In addition, they face expensive fees to send money and maintain their accounts. Yet they still struggle to access savings, insurance and credit, financial services that Fingo promises to deliver to its users; however, it currently offers them cheaper transfer fees, subsidized rates on checking accounts, cash back rewards and other features including payment links and tailored savings plans.
After a $200,000 pre-seed round, Fingo stepped into YC S21 and raised $4 million in seed funding by the end of that year. Multi-stage venture capital firm HOF Capital led the round with participation from Hustle Fund, Pioneer Fund, TCVP, Launch Africa, Chandaria Capital, Naiban (Nairobi Angel Network), Chui Ventures, as well as Monzo and Twitch co-founders and Google executives, Facebook and Paytm. What followed was a signed partnership with Ecobank, and Fingo began integrating its software with the bank towards launch, while awaiting regulatory approval from the Central Bank of Kenya (CBK), which finally came in the first quarter of this year .
The Fingo app
Before the green light was given, the CBK was all along trying to understand the framework that Fingo and Ecobank had set up for their relationship, especially when it comes to data, transactions and customer interactions. Unlike Nigeria, where banking and fintech collaboration is common, allowing the latter group to launch quickly (which ultimately contributes to why the country has attracted the bulk of Africa’s fintech funding), this is in Kenya rare. Fingo claims to be the first Kenyan neobank, so it’s quite understandable when you consider how long it took to get approvals and get to market.
Meanwhile, Muhoya noted on the phone call that despite the wait, the fintech still has most of its venture capital with the bank, as it maintained its 15-person workforce and barely had any expenses other than paying salaries and developing its business. software. So it’s not additional capital for operations, especially in this challenging fundraising environment.
Now that the partnership has been approved, the Fingo Africa app will provide its users with a bank account “less than 5 minutes”, combined with free peer-to-peer transactions and instant access to multiple services such as savings, financial education and smart spending analysis, it said. company in a statement. The fintech says it has acquired a waiting list of 50,000 customers within 24 hours of launch. However, it will have a lot of work for itself if the plan is to get millions on board in a market where mobile money reigns supreme (Safaricom’s M-Pesa controls over 90% of that medium) and a banking sector dominated by companies like KCB and Equity Bank (who have their digital banking products).
Fingo’s partnership with Ecobank, which claims to have the largest footprint of any bank in Africa and covers more than 30 countries, can provide the scale the fintech needs outside of Kenya. Both entities are planning a pan-African rollout, with an imminent expansion to the rest of East Africa by the end of the year, according to Muhoya. Digital banking counterparts serving consumers in that region include Finclusion and Koa.
“Our partnership with Fingo Africa is a critical milestone in our mission to equip African youth with the vital financial tools they need to succeed. Together, we will launch youth-focused financial products, including quick access to bank accounts, savings options and cost-effective transactions, across Ecobank’s pan-African footprint,” Diallo Djiba, senior fintech advisor to Ecobank Group, said in a statement. “We are excited to expand our current solutions through this partnership and lead the way in youth banking in Africa. Our goal is to reach millions of young people in the 33+ African markets where Ecobank operates.”