Nigeria’s digital bank, Kuda Bank raises $25 million in a Series A round to continue to provide a modern banking service for Africans and the African diaspora.
According to a press release seen by Nairametrics, the funding round was led by New York-based venture capital, Valar Ventures, with participation from existing investor Target Global, an international venture capital firm headquartered in Berlin, Germany and several other existing investors.
This is the first time that Valar Ventures which has invested in a number of fintech startups, including N26, the UK’s Wise, and Mexico’s Albo has backed an African startup.
Launched in 2019, and headquartered in Lagos and London, Kuda Bank 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 raised $10 million dollars 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 also has over one million downloads on play store.
The challenger bank has grown to provide B2C and 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.
Kuda offers a suite of banking services with a more accessible user interface and a more modern approach where you can interact with the bank using a mobile app, and in addition to basic banking services, it provides tools to help people manage their money more intelligently.
This 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.
Babs Ogundeyi, CEO and co-founder of Kuda, 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 center. We recognize 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 advise some of the world’s most successful challenger banks will without doubt be a critical part of our successes going forward.”
Andrew McCormack, a general partner, and co-founder at Valar 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.”