Nigerian fintech start-up Kuda has raised $1.6 million in pre-seed funding in preparation for its beta launch as a digital bank.
The Lagos and London-based company 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 Nigeria’s Central Switch — a SWIFT-like system that facilitates bank communication and settlements.
A representative for the Central Bank of Nigeria (speaking on the background) confirmed Kuda’s banking license and status, telling TechCrunch, “As far as I’m aware there is no other digital bank [in Nigeria] that has a micro-finance license.”
The round saw participation from Startupbootcamp (the AfriTech accelerator programme that Kuda joined last year), as well as from angel investors Haresh Aswani of Tolaram Group and Ragnar Meitern.
The three-year-old fintech started out as the lending platform Kudimoney
The three-year-old fintech started out as the lending platform Kudimoney, but in June of this year, it re-branded to Kuda and secured its banking licence from the Central Bank of Nigeria (CBN). It is the first mobile-first bank in the country.
“Kuda’s vision of democratising financial services and making it easily accessible and affordable for all Africans aligns with my philosophy on transforming industries and value creation,” says Aswani. “The founders of Kuda are extremely smart and knowledgeable about the space.”
The digital bank offers a free banking platform, a debit card, an app which tracks spending and the lowest transfer rates in the Nigeria – with a look to offer consumer savings and P2P payments in the coming months.
Kuda’s co-founder and CEO, Babs Ogundeyi, says the mobile-first bank is built “to address the serious pain points for the world’s most mobile centric consumers”.
Ogundeyi adds: “We are building a radically different type of bank that puts consumers back in control of their finances.”
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 the 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.
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.
Ogundeyi — a repeat founder who exited classifieds publication Motortrader and worked in a finance advisory role to the Nigerian government — co-founded Kuda in 2018 with former Stanbic Bank software developer Musty Mustapha.
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