In a groundbreaking achievement, Kuda, the innovative money app designed for Africans, has surpassed six million customers in Nigeria. The milestone reflects the company’s unwavering dedication to making financial services more accessible, affordable, and rewarding for all Africans.
Since its inception, this fintech company has experienced consistent growth, revolutionizing the Nigerian Fintech landscape through disruptive marketing and continuous improvements to its banking app. The app now offers a wide range of services, including savings, payments, and credit facilities, catering to both retail and business customers.
Kuda chief executive officer (CEO) and co-founder Babs Ogundeyi
Mr. Babs Ogundeyi, the Group Chief Executive Officer (GCEO) of Kuda Technologies Limited, expressed his excitement and pride in reaching this significant milestone. He attributed the achievement to the relentless commitment and resilience of the entire Kuda team in developing sustainable and innovative financial solutions that benefit Africans across the continent.
Highlighting Nigeria as a key market for Kuda, Ogundeyi affirmed the company’s commitment to expanding its footprint in other African markets, leveraging the momentum of its customer acquisition success. He emphasized that Kuda’s growth from a digitally-driven startup to an industry leader was a testament to their vision of providing accessible, affordable, and rewarding financial services.
With an eye toward the future, Kuda is motivated to extend its success story beyond Nigeria and reach out to other parts of the world. Their mission is to provide a better alternative to traditional finance by offering services such as free money transfers, business banking, and instant credit access through digital devices.
In the four years of its operations in Nigeria, Kuda has achieved several significant milestones. The recent six millionth customer sign-up marks yet another noteworthy achievement for the fintech company. Back in August 2019, Kuda launched its beta app and received substantial support, raising over $90 million from esteemed institutional investors, including Valar Ventures and Target Global.
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert. As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard
Nigeria’s high rising digital-led financial platform, Kuda Microfinance Bank has announced that it has passed the two-million customer milestone, just six months after the bank signed up its one-millionth customer.
The Bank has been on a consistent upward trajectory since 2020, growth that the bank credits to aggressive marketing, an improved banking app, and increased adoption of digital banking since the COVID-19 pandemic broke out.
According to the Head of Growth & Analytics at Kuda Bradley Want, “Nigerians seem to be more open to skipping the queues and the hassles that come with being at a physical bank. Everyone knows that it can be quite uncomfortable. We’re taking advantage of this positive change in perception by being where people are all the time and offering them value they can’t ignore.”
Want added that the digital-led bank was also recently in the news for winning the coveted ‘Neobank of the Year’ award at the 2021 BusinessDay BAFI (Banking and Financial Institutions) Awards.
According to him” Kuda picked up that prize just weeks after winning the ‘In-House Legal Team of the Year’ award at the 2021 ESQ Nigerian Legal Awards. The bank’s Head of Legal, Dolapo Akinola, also received an individual ‘40 Under 40’ honour at the same event.
On the back of these successes, Kuda has rolled out its independent Visa debit cards, both physical and virtual, with free delivery nationwide.”
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
Leading Nigerian fintechKuda Bank, has concluded a successful $55 million Series B round at a valuation of $500 million coming on the heels of its Series A of $25 million just a little over four months ago. Interestingly, this round was co-led by existing investors Target Global and Valar Ventures, the firm co-founded and backed by PayPal co-founder, Peter Thiel. SBI Investment and other previous angels also participated.
Kuda Co-founder and CEO Babs Ogundeyi
Kuda plans to use the funds to build on its new services for Nigeria as well as prepare for a continental expansion. According to Co-founder and CEO Babs Ogundeyi, Kuda aims to build a new take on banking services for “every African on the planet.”
“We’ve been doing a lot of resource deployment in our operational entity, in Nigeria. But now we are doubling down on expansion and the idea is to build a strong team for the expansion plans for Kuda,” Ogundeyi told TechCrunch, without disclosing which countries Kuda is eyeing.
“For Babs and Musty, it was always about building a pan-African bank, not just a Nigerian leader,” said Ricardo Schäfer, the partner at Target Global. “The prospect of banking over 1 billion people from day one really stood out for me at the beginning.”
Ogundeyi co-founded Kuda with the now CTO, Musty Mustapha, in the second half of 2019. The startup launched in Nigeria as a no-fees, digital-only bank with $1.6 million pre-seed funding. It has since witnessed significant growth.
As of November 2020, Kuda had 300,000 customers and was processing an average of $500 million worth of transactions per month.
By March this year, Kuda’s registered users had more than doubled to 650,000, after the startup processed $2.2 billion a month earlier. Presently, Kuda has 1.4 million people in its user base.
Beyond just basic financial services, Kuda now offers credit to its users by way of an overdraft allowance, which the company pre-qualifies the most active users for.
In the second quarter of the year, Kuda disbursed $20 million worth of credit to over 200,000 qualified users, with a 30-day repayment period.
According to Ogundeyi, Kuda has seen “minimal” default because of its approach. “We use all the data we have for a customer and allocate the overdraft proportion based on the customer’s activities, aiming for it not to be a burden to repay,” he said.
“Kuda is our first investment in Africa and our initial confidence in the team has been upheld by its rapid growth in the past four months,” said Andrew McCormack, a general partner at Valar Ventures.
“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.”
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
Kuda Bank, the Africa-focused challenger bank, has provided early investors an exceptional chance to exit their investment via a secondary sale after the recent announcement of a $37 million Series A Financing Round.
Kuda chief executive officer (CEO) and co-founder Babs Ogundeyi
SM River, a consortium comprised of Raj Kulasingam, Haresh Aswani, Vishal Agarwal, and Alwin Magimay that was the primary investor in Kuda’s USD1.6 million pre-seed round, took advantage of the secondary sale to realize a significant return on their initial investment.
In Kuda’s pre-seed round, SM River was the largest investor, and its stock was purchased by Kuda’s current investors.
“It was important to give Kuda’s earliest investors an exit opportunity, and we are delighted that we have been able to repay their early backing of the company with a material return on their investment. We are particularly grateful for the foresight shown by SM River in recognising the potential in Kuda during the company’s earliest days. They have been incredible investors and have provided Kuda with so much value beyond money by leveraging their knowledge, reputations and networks to help Kuda scale and grow,” Babs Ogundeyi, Kuda Founder & CEO, said.
Ogundeyi praised the investor and stated, “We’d want to express our gratitude to the consortium for their early involvement and support to Kuda’s achievement. SM River will renounce its membership on the Board of Directors in order to realize their investment in Kuda.”
“When we met Babs and Musty, we saw the huge opportunity for their vision of the creation of Nigeria’s first digital bank and backed them to take advantage of this opportunity. It’s been an incredible journey of growth and scale and we commend the Kuda team for getting the company to where it is in such a short space of time. As angel investors, who focus on early-stage investments, it’s now time to recycle our capital, find the next Kuda and hand over the baton to institutional VCs to guide the founders to further scale and grow. We will continue to watch with pride as Kuda delivers financial innovation to Africa and the world,” Raj Kulasingam, speaking on behalf of the SM River Consortium, shed further insight on his departure.
This exit opportunity is another another example of Africa’s Fintech sector’s rapid development, demonstrating how Africa’s fast-growing technological start-ups are producing good returns and multiples for early investors and shareholders.
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 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
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.”
Kuda CEO, Babs Ogundeyi. Image credits: Kuda
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.
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
The biggest seed funding round for any African startup! Nigeria‘s fintech startup Kuda, has defied the odds, beating naysayers about the country’s investment environment to raise $10 million in seed funding round. Last year, it raised $1.6 million in pre-seed.
“We want to bank every African on the planet, wherever you are in the world,” CEO Babs Ogundeyi said in an interview. “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.”
Kuda CEO, Babs Ogundeyi.
Here Is What You Need To Know
The $10 million is being 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).
Kuda will be using the investment to continue accelerating its growth plans and to keep up with customer demand. It is also in the process of opening a London office to attract top tier talent outside Nigeria.
With this investment, Ricardo Schäfer, Partner at Target Global joins Kuda’s board.
Last year, 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. “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 300,000 customers — first consumers and now also small businesses — and on average processes over $500 million of transactions each month. 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.
“Kuda’s relentless drive and ability to execute quickly has allowed it to carve out a highly disruptive business model in the finance and banking industry,” said Avi Eyal, partner at Entrée Capital.
Kuda is a Lagos and London-based company. Last year, 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.
“The reason for the full license is because of monetization. As a bank you need to be able to lend, and in Nigeria if you don’t have a full license it’s hard to lend and make money.” Kuda bank founder Babs Ogundeyi said in an interview.
“We have built our own full-stack banking software from scratch. We can also take deposits and connect directly to the switch,” he added, referring to the Nigeria’s Central Switch — a SWIFT-like system that facilitates bank communication and settlements.
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.
Ogundeyi — a repeat founder who exited classifieds site Motortradertrader.ng and worked in a finance advisory role to the Nigerian government — co-founded Kuda in 2018 with former Stanbic Bank software developer Musty Mustapha.As of 2014, Nigeria has held the dual distinction as Africa’s largest economy and most populous country (with 190 million people).
To scale there, and add some physical infrastructure to its online model, Kuda has correspondent relationships with three of Nigeria’s largest financial institutions: GTBank, Access Bank and Zenith Bank.
He clarified the banks are partners and not investors. Kuda customers can use these banks’ branches and ATMs to put money into bank accounts or withdraw funds without a fee.
“Even though we don’t own a single branch, we actually have the largest branch network in the country,” Ogundeyi claimed.
Kuda’s plans to generate revenues focus largely around leveraging its bank balances.
“We plan to match different liability classes to the different asset classes that we create. That’s how we make money, that’s how we get efficiency in terms of income,” Ogundeyi said.
In Nigeria, Kuda enters a potentially revenue-rich market, but its one that already hosts a crowded fintech field — as the country becomes ground zero for payments startups and tech investment in Africa.
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
Nigeria ‘s fintech startup Kuda — a digital-only retail bank —has joined the league of fund raisers, with a new $1.6 million pre-seed funding.
“As far as I’m aware, there is no other digital bank [in Nigeria] that has a micro-finance license,” a representative for the Central Bank of Nigeria was quoted as confirming Kuda’s banking license and status.
Here Is The Deal
The $1.6 million pre-seed funding investment was led by investor Haresh Aswani with Ragnar Meitern and other angel investors joining.
By this investment, Aswani will take a position on Kuda’s board.
Kuda plans to use its seed funds to go from beta to live launch in Nigeria by fourth-quarter 2019. The startup will also build out the tech of its banking platform, including support for its developer team located in Lagos and Cape Town, according to Ogundeyi.
Kuda also intends to expand in the near future. “It’s Nigeria for right now, but the plan is build a Pan-African digital-only bank,” he said.
Kuda CEO Babs Ogundeyi believes the startup can scale and compete in Nigeria on a number of factors, one being financial safety. He names the company’s official bank status and the Nigeria Deposit Insurance Corporation security that brings as something that can attract cash-comfortable bank clients to digital finance.
Ogundeyi also points to offerings and price.
‘‘We look to be the next generation bank where you can do everything — savings, payments and transfers — and also the one that’s least expensive,” he said.
Why The Investors Invested
The investors must have been attracted by the Nigerian Central Bank’s increasing policy towards financial inclusiveness, as well as the staggering number of the unbanked in Nigeria. Nigeria’s first online-only bank hopes to capitalise on this opportunity. Apart from investing, Haresh Aswani the lead investor would now be sitting on the company’s board.
In both raw and per capita numbers, Nigeria has been slower to convert to digital payments than leading African countries, such as Kenya, according to joint McKinsey Company and Gates Foundation analysis done several years ago. The same study estimated there could be nearly $1.3 billion in revenue up for grabs if Nigeria could reach the same digital-payments penetration as Kenya.
A number of startups — established and new — are going after that prize in the West African country — several with a strategy to scale in Nigeria first before expanding outward on the continent and globally.
San Francisco-based, no-fee payment venture Chipper Cash entered Nigeria this month.
Series B-stage Nigerian payments company Paga raised $10 million in 2018 to further grow its customer base (that now tallies 13 million) and expand to Asia and Latin America.
Kuda is a Lagos and London-based company. It recently launched the beta version of its online mobile finance platform. Kuda also received its banking license from the Nigerian Central Bank, giving it a distinction compared to other fintech startups.
“Kuda is the first digital-only bank in Nigeria with a standalone license. We’re not a mobile wallet or simply a mobile app piggybacking on an existing bank,” Kuda bank founder Babs Ogundeyi told TechCrunch.
“We have built our own full-stack banking software from scratch. We can also take deposits and connect directly to the switch,” Ogundeyi added, referring to the Nigeria’s Central Switch — a SWIFT-like system that facilitates bank communication and settlements.
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,” according to Ogundeyi.
Ogundeyi — a repeat founder who exited classifieds site Motortradertrader.ng and worked in a finance advisory role to the Nigerian government — co-founded Kuda in 2018 with former Stanbic Bank software developer Musty Mustapha.As of 2014, Nigeria has held the dual distinction as Africa’s largest economy and most populous country (with 190 million people).
To scale there, and add some physical infrastructure to its online model, Kuda has correspondent relationships with three of Nigeria’s largest financial institutions: GTBank, Access Bank and Zenith Bank.
He clarified the banks are partners and not investors. Kuda customers can use these banks’ branches and ATMs to put money into bank accounts or withdraw funds without a fee.
“Even though we don’t own a single branch, we actually have the largest branch network in the country,” Ogundeyi claimed.
Kuda’s plans to generate revenues focus largely around leveraging its bank balances.
“We plan to match different liability classes to the different asset classes that we create. That’s how we make money, that’s how we get efficiency in terms of income,” Ogundeyi said.
In Nigeria, Kuda enters a potentially revenue-rich market, but its one that already hosts a crowded fintech field — as the country becomes ground zero for payments startups and tech investment in Africa.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world
