Kuda has raised USD55million in the company’s recently closed Series B equity raise round. Kuda, which operates as a digital bank, was founded in 2019 by Babs Ogundeyi and Musty Mustapha. It is licensed by the Central Bank of Nigeria (CBN) as a full services micro finance bank.
The announcement was made via the company’s Facebook social media handle, with the bank stating that “We have just closed a Series B fundraising round of USD55million, and we are excited for the future of banking in Africa! We are thankful to everyone who has backed our dream with their money, and to over 1.4 million people who trust us to continue to be the best bank for them.”
This new raise is coming very quickly after the bank’s Series A round which closed in March 2021. In the Series A, the company raised USD25million led by Valar Ventures. This Series B was led by the bank’s existing investors. It is co-led by Valar Ventures and Target Global. It also includes funding from SBI and a number of previous angel investors. Kuda was not proactively raising money at the time the Series B was initiated and closed.
The new equity capital raise of USD55m was at a valuation of USD500million.
In February 2021, the bank disclosed that it had processed over USD2billion in transactions in that month. With a focus on digital banking in Nigeria, the fintech-focused start-up provides B2C and B2B banking services to its spectrum of consumers.
Kuda’s primary strategy is to take on incumbent brick-and-mortar banks in Nigeria with a mobile-first, personalised and often cheaper set of banking services built on newer, API-based infrastructure. The new raise will be focused on expanding its services in Nigeria as well as prepare the bank to launch in other countries in Africa. The bank hopes to take digital banking to every African.
Commenting on the raise, CEO, Babs Ogundeyi noted to TechCrunch that “We’ve been doing a lot of resource deployment … 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.
“We still see Nigeria as an important market and don’t want to be distracted so don’t want to disrupt those operations too much. It’s a strong market and competitive. It’s one that we feel we need to have a strong hold on. So, this funding is to invest in expansion and have more experience in the company with relation to expansion.”
The banking model adopted by Kuda , neo-banking, is one of the fastest growing banking models in the world. Research analysts at Grand View research forecast neobanks to grow at the rate of 48% between 2021 and 2028, with an industry value of USD722.6billion.
Similar neo banks across the world include: (1) WeBank in China, (2) Chime in USA (3) N26 in Europe, (4) Nubank in Brazil (5) Varo in USA, (6) Revolut in Europe, amongst others.