Barely 4 months after Nigerian digital bank, Kuda, secured $10m seed round (Africa’s biggest ever seed funding round so far) the startup has gone ahead to secured a $25m Series A.
“We want to bank every African on the planet, wherever you are in the world,” CEO Babs Ogundeyi said in an interview during its last fund raise. “We have built the core banking services in-house so we own the full stack. It means we don’t have to piggy back on another financial institution. We may choose to partner on certain products but we don’t have to.”
Here Is What You Need To Know
- The investment was led by Valar Ventures, the company co-founded and backed by Peter Thiel, with Target Global and other undisclosed investors joining in.
- Kuda plans to use the new funds to broaden its credit offerings, grow business services, add more integrations, and expand into new markets.
- The funding will also go to expanding to other countries.
- In November, 2020, Kuda raised $10 million seed led by EU-based giant VC Target Global, with Entrée Capital and SBI Investment (once part of the defunct SoftBank) also participating. Other participating investors include Raffael Johnen (founder of Auxmoney), Johan Lorenzen (founder of Holvi), Brandon Krieg/Ed Robinson (founders of Stash), and Oliver and Lish Jung (angel investors in Nubank, Revolut, and Chime).
- In 2019, the startup also raised Kuda raised $1.6 million pre-seed funding investment led by investor Haresh Aswani with Ragnar Meitern and other angel investors joining.
Why The Investors Invested
A Bank With A Different Touch, Executing Quickly
“The emergence of digital challenger banks, providing customers with a free, digital and significantly better banking experience compared to services offered by traditional banks, has seen huge success across the globe,” said Dr. Ricardo Schäfer, Partner at Target Global, in a statement, last year. “Kuda is one of Africa’s leading digital challenger banks and one of the fastest growing fintechs on the continent. We are very excited to be working with Babs, Musty and the entire Kuda team to further build on the fantastic momentum they have had since inception and support them in taking the company to the next level.”
Since launching in September 2019, Kuda has reportedly picked up around 650,000 customers — first consumers and now also small businesses — and processed about $2.2 billion transactions in February 2021. To understand the scale of this traction, even with over 500 branches and business offices in all states in Nigeria, Nigeria’s Zenith Bank Plc, one of the country’s largest banks by market cap (₦4.83 trillion as at 2017), and largest bank by customer deposit, still has less than 2 million accounts, more than 30 years after it commenced business in Nigeria.
Peter Thiel’s company, Valar Ventures, was co-founded and is funded by him. Valar has previously funded a number of fintech companies, including N26, TransferWise, Stash, and, most recently, BlockFi and BitPanda. This is the first time Valar has backed an African startup.
Read also: Nigerian Telco 9Mobile Turns To Banking With The Country’s First Ever Payment Service License
What Kuda Does
Kuda is a Lagos and London-based company. In 2019, it launched the beta version of its online mobile finance platform. The startup has also received its banking license from the Nigerian Central Bank, giving it a distinction compared to other fintech startups.
Kuda offers checking accounts with no monthly-fees, a free debit card, and plans to offer consumer savings and P2P payments options on its platform in coming months.
“You can open a bank account within five minutes, do all the KYC in the app, and you get issued a new bank account number,” said Ogundeyi.
Kuda was co-founded in 2018 by Ogundeyi and Musty Mustapha, a former Stanbic Bank software developer who exited classifieds platform Motortradertrader.ng and served in a finance advisory position for the Nigerian government. Nigeria was Africa’s largest economy and most populous country in 2014, according to the United Nations (with 190 million people).
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer
Kuda $25m Kuda $25m