A Nigerian digital bank, Kuda Bank, has raised $25 million in Series A funding led by Valar Ventures, a New York-based venture capital.
The money was put into the company by Valar, Target Global, an existing investor with its headquarters in Berlin and several others.
According to the digital bank, the new fund will be used 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 trailing with select customers.
Kuda Bank began operations in 2019 and currently provides services for consumers to save and spend money and it has recently introduced overdrafts (essentially revolving credit for individuals).
In December 2020, Kuda, which has its headquarters in Lagos and London, raised $10 million in a seed round, the largest-ever seed round raised by a startup out of Africa. At the time of the seed round, Kuda had registered 300,000 customers: now, that figure has more than doubled to 650,000.
The digital bank, which has over one million downloads on the Playstore, has grown to provide Business-To-Company (B2C) and Business-To-Business (B2B) banking services to customers in Nigeria and has processed over $2 billion in transactions during February 2021, up from $5.2 million in February 2020.
“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, the CEO and co-founder of Kuda, Mr Babs Ogundeyi, said of the new investment.
He further said, “We recognise the great strides that we have taken to get to the point at which we are now, but even more importantly we recognize 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.”
“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 advice some of the world’s most successful challenger banks will without doubt be a critical part of our successes going forward,” he added.
In his remarks, a general partner and co-founder at Valar, Mr Andrew McCormack, noted that “Nigeria is 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,” he added.
