Newly launched financial technological startup, Fintech Farm, which is based in the United Kingdom and known for creating digital banks in emerging markets has raised the sum of $7.4 million in seed funding.
Leading the seed round was Flyer One Ventures and Solid; also participating were TA Ventures, Jiji, u.ventures and AVentures Capital.Fintech Farm said its plans for the funds raised is to use its investments to launch neobanks in Nigeria and eight countries over the next 24 months.
The company has visited Nigeria severally and its founders have stated that Nigeria is one of their favourite countries. However, for its operations in Nigeria, the company would be adopting a different approach.
Instead of partnering with banks, it has obtained a cooperative license and would only partner with a bank to scale further if the company gets up to 200,000 customers.
Speaking on the reason for Nigeria, Bezkrovnyy said in a statement that there is an opportunity for a mass credit card in Nigeria as credited cards issued by traditional banks are limited to upper-middle class.
He said, “In terms of the credit product, we see an opportunity for a “mass credit card” in Nigeria. Currently, credit cards issued by traditional banks are limited to the upper-middle class”.
He further added that, “At the same time, APRs of credit offerings from neobanks and alternative lenders may well be over 100%. We are going to fill this gap and accept those customers neglected by traditional banks and offer them fair interest rates.”
Neobanks – also known as digital banks or challenger banks are banks that operates exclusively online without traditional physical branch networks. Globally, hundreds have sprung forth the past few years to challenge incumbents in their respective markets.
Fintech Farm belongs to the category of tech startups that receive the highest amount of funding from venture capitalists, as Digital banks have received significant seed funding from venture capitalist companies.
Statement On The Raise and Its Plan
As part of its financing round, Vladimir Mnogoletniy, co-founder of Genesis, the parent company of African online classifieds platform Jiji, is said to join Fintech Farm’s board. He is also a partner at co-lead investor Flyer One.
The founders believe the expertise and understanding of Mnogoletniy and his Jiji team will be pivotal to Fintech Farm’s growth.In a statement, Mnogoletniy said Jiji, having built one of the largest e-commerce platforms on a GMV basis, was looking for the right partner to enter the neobanking space. Investing in Fintech Farm was a strategic investment to that end.
As Fintech Farm carries out its expansion plans, it also intends to spend heavily on marketing and hiring talent, especially engineers and data scientists.
About Fintech Farm
Fintech farm is a newly launched fintech startup based in the U.K that creates digital banks in emerging markets.
It is founded by Dmytro Dubilet, Nick Bezkrovnyy and CEO Alexander Vityaz.
The firm launched its first market in November 2021 called Azerbaijan. Upon its launch, it started with the provision of loans to customers with thin credit histories via cards and mobile applications.
As a U.K.-based fintech, Fintech Farm takes a different approach from the conventional model used by neobanks.
The tech start-up also uses a different name in each country it launches but maintains the same design and mascot.
Fintech Farm has issued over 100,000 cards and by the end of the year, it hopes to get this number up to a million.