Nigeria’s first fully digital bank, Kuda, has raised $55 million in a Series B funding round to fuel its expansion outside the country.
According to the company, the latest funding round was an inside round coming from existing investors and was made at a valuation of $500 million.
The round was co-led by Valar Ventures and Target Global, it also includes SBI and a number of previous angels also participating. Techcrunch reported that Kuda was not proactively raising money at the time the Series B was initiated and closed.
This latest round comes just months after the company announced its $25 million Series A funding round led by Valar Ventures. And less than a year after it made a record-breaking $10 million seed round led by Target Global.
Kuda’s $10 million seed round is the largest seed fund to be raised by a tech company in Africa.
With the latest funding, Kuda bank has now raised a total of $91.5 million from VC investors over the last two years.
Over 1.4 million users
The quick succession of Kuda’s equity round comes on the back of some impressive early growth for the startup.
During its raise earlier in the year, the company revealed that it had 650,000 registered users. Now, Kuda is saying that it has over 1.4 million registered users, which is more than double the users it had in March.
Ricardo Schäfer, partner at Target who led the latest round expressed excitement at what the founders at Kuda are building. “We felt that Babs and Musty are ambitious on another level. For them, it was always about building a pan-African bank, not just a Nigerian leader. The prospect of banking over 1 billion people from day one really stood out for me at the beginning.”
Andrew McCormack, general partner at Valar Ventures on his part says Kuda approach to the market was the reason behind its decision to invest in the startup. He added that the startup’s rapid growth in the last four months has further upheld its confidence.
“With a youthful population eager to adopt digital financial services in the region, we believe that Kuda’s transformative effect on banking will scale across Africa and we’re proud to continue supporting them.”
Andrew McCormack, general partner at Valar Ventures
Kuda has come a long way since rebranding from Kudimoney, a simple fintech platform offering regular fintech solutions.
The Microfinance banking licence it received from the Central Bank of Nigeria (CBN), significantly helped in its transition into Kuda; a full-service digital neo bank.
The licence has made it unique among neo banks as it allows it to be more flexible and fast-moving when it comes to creating new products.
Its mobile-first, personalised and cheaper banking services built on newer, API-based infrastructure, has helped its growth over the last few months.
Recently, it launched an overdraft allowance its first move into credit for its users. Kuda’s co-founder and CEO Babs Ogundeyi, says it already has qualified over 200,000 users using the overdraft and has pushed out $20 million worth of credit with a 30-day repayment.
With the latest influx of funds, Babs says the company plans to money double down not just on new services for Nigeria, but to prepare its launch into more countries on the continent.
However, the company did not reveal the countries it plans on expaning to outside Nigeria.
Although it looking at Africa expansion, Babs says it still has a major focus on Nigeria. “We still see Nigeria as an important market and don’t want to be distracted so don’t want to disrupt those operations too much. It’s a strong market and competitive. It’s one that we feel we need to have a stronghold on. So this funding is to invest in expansion and have more experience in the company with relation to expansion.”
Kuda is not the only startup in the ecosystem raising money. Others startups raising include payments company Chipper Cash, Airtel Africa, online lender FairMoney and more.
This shows that a lot of money is being pumped into the African fintech market at the moment.
However, the quick succession with which Kuda has raised shows that the company is showing the right growth metrics that is making investors happy.
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