Nigeria-based challenger bank Kuda Bank hauled in a $25m Series A round to boost its banking services for Africans.
The funding round was led by New York-based VC, Valar Ventures, with participation from existing investor Target Global, a Berlin-based VC firm and other existing investors.
This new fund will be used to speed up customer acquisition, expand its teams and leadership roles and develop new features including a lending service that the company is currently trailing.
Launched in 2019, headquartered in Lagos and London, Kuda Bank currently allows consumers to run a current account, save money and earn annual interest. Having recently introduced overdrafts, the bank offers tools to help people manage their money more intelligently.
Furthermore, its suite of banking services also includes a user interface where customers can interact with the bank using a mobile app.
In December last year, Kuda raised $10m in a seed round boasting of 300,000 registered customers at the time. That figure has more than doubled to 650,000 already. Additionally, the digital bank has processed over $2bn in transactions as seen in February 2021, up from $5.2m in February 2020.
Commenting on the funding round, Kuda CEO and co-founder Babs Ogundeyi said, “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.
Indeed, the continent has been attracting a slew of investors. Having already backed other FinTech firms around the world such as Germany’s N26, the UK’s Wise and Mexico’s Albo, the investment into Kuda is Valar Ventures’ first foray into Africa.
Adding on the sector’s upward curve in Africa, Valar general partner and co-founder Andrew McCormack said, “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.”
Indeed, the FinTech ecosystem in Nigeria is going from strength to strength. Just this week, African payments company Flutterwave – which secured $170m funding the previous week – collaborated with PayPal to enable PayPal customers globally pay African merchants through its Pay with PayPal feature.
With this partnership, African businesses will be able to connect with the more than 377 million PayPal accounts globally and overcome the challenges in the limited banking infrastructure present in the region.
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