Kuda, Nigeria’s digital banking startup, has raised $25 million in a Series A funding round to finance its ambitious growth plans.
It was founded in 2016 as the lending platform Kudimoney by Babs Ogundeyi and Musty Mustapha (pictured above). In June 2019, the startup rebranded as Kuda after obtaining a banking licence from the Central Bank of Nigeria (CBN) to launch a full-service digital bank.
Kuda became Nigeria’s first and only full-stack and mobile-first bank after receiving regulatory approval, enabling Nigerians to open a current account, save money, and earn annual interest.
This fundraise makes a remarkable leap for Kuda, as the digital back was only raised US$10 million seed round in November of last year, but has quickly advanced to Series A with a US$25 million funding round led by New York-based venture capital firm Valar Ventures.
The investment into Kuda is Valar Ventures’ first foray into Africa, having already backed other well known financial technology firms around the world. The fund, which was founded by Peter Thiel, has previously invested in Germany’s N26, the UK’s Wise and Mexico’s Albo.
The round also includes participation from existing investor Target Global, an international venture capital firm headquartered in Berlin, and several other existing investors.
Since launching in September 2019, Kuda has grown to provide B2C and B2B banking services to over 600,000 customers in Nigeria and processed over US$2 billion in transactions during February 2021, up from US$5.2 million in February 2020. Kuda will use the funding to drive growth in Nigeria and further afield into other select countries in Africa.
Valar Ventures is making its first foray into Africa, having previously funded other well-known financial technology companies around the world. Peter Thiel’s fund has previously invested in Germany’s N26, Wise in the United Kingdom, and Albo in Mexico.
The CEO and co-founder of Kuda 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”.
“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 of Valar Ventures said that Nigeria is at a turning point in terms of digital banking adoption.
“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.” Mr. McCormack will join the Board of Kuda Technologies following the conclusion of the funding round,” he said.