Nigerian digital banking startup Kuda has announced a US$25 million Series A funding round in order to help it fund its aggressive growth plan.
Launched in 2016 as lending platform Kudimoney, Kuda rebranded in June of 2019 and received a banking licence from the Central Bank of Nigeria (CBN) to launch a full service digital bank. That regulatory approval made Kuda Nigeria’s first and only full-stack and mobile-first bank, allowing Nigerians to run a current account, save money, and earn annual interest.
Kuda only raised a US$10 million seed round in November of last year, but has already graduated to Series A with a US$25 million round led by New York-based venture capital firm Valar Ventures. The investment into Kuda is Valar Ventures’ first foray into Africa, having already backed other well known financial technology firms around the world. The fund, which was founded by Peter Thiel, has previously invested in Germany’s N26, the UK’s Wise and Mexico’s Albo.
The round also includes participation from existing investor Target Global, an international venture capital firm headquartered in Berlin, and several other existing investors.
Since launching in September 2019, Kuda has grown to provide B2C and B2B banking services to over 600,000 customers in Nigeria and processed over US$2 billion in transactions during February 2021, up from US$5.2 million in February 2020. Kuda will use the funding to drive growth in Nigeria and further afield into other select countries in Africa.
The startup, which employs more than 120 employees across office locations in Lagos, London, and Cape Town, plans to speed up customer acquisition, expand leadership roles, and build out new features including a new easy-to-use lending option that the company is currently trialling with select customers.
“At Kuda, we know that the companies which are best able to leverage technology and talent will be the same companies which are best positioned to provide huge numbers of people across Africa with access to a vastly improved financial system that places the customer at its centre. We recognise the great strides that we have taken to get to the point at which we are now, but even more importantly we recognise just how far we still have to go to achieve our objective of providing every African with access to powerful, appropriate and affordable financial services,” said Babs Ogundeyi, chief executive officer (CEO) and co-founder of Kuda.
“With this in mind, we could not be more pleased that Valar Ventures has decided to come on board and join us on this mission. Their insights and experience in helping advise some of the world’s most successful challenger banks will without doubt be a critical part of our successes going forward.”
Valar Ventures general partner Andrew McCormack said Nigeria was at a tipping point in the adoption of digital banking.
“With the rapidly growing, youthful population who are open to new financial alternatives, Kuda is well-positioned to benefit and will transform the landscape of African banking. We are excited to lead their Series A and continue on the journey alongside Kuda.” Mr. McCormack will join the Board of Kuda Technologies following the conclusion of the funding round,” he said.