Kuda Bank raises $55million at $500 Million valuation, expanding to other African countries.

Kuda Bank raises $55million at $500 Million valuation, expanding to other African countries.

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Kuda Bank, Nigerian digital bank and fintech startup has raised $55 million in Series B funding at $500 Million valuation, plans to unfold into other African countries. The CBN licensed microfinance bank morphed into digital bank also plan to launch a new product for its Nigerian market.

The Fintech company is also referred to as the bank of the free, because you get a free debit card when you open an account with them, send money with no charges, and also receive 15℅ interest annually when you save automatically which distinguishes it from other banks.

The company was founded in 2018 and was first known as KUDIMONEY. The name was later changed to KUDA just before the $1.6 million raise in 2019. The co-founders and CTO of the company were Babs Ogundeyi and Musty Mustapha respectively. It was founded as a lending platform before transitioning into a digital bank.

Kuda has secured $25m in Series A funding led by US based venture capital company Valar Ventures in March 2021 and a $10 million seed round in November 2020. With a $1.6 million pre-seed raise in September 2019 led by angel investors Haresh Aswani, Ragnar Meitern and others including Japan-based Strategic Business Investor Investment and a $15,000 pre-seed in 2018, which sums up to $91.6 million.

According to report, as at March 2021 of this year, the company has only 650,000 registered users which was revealed when announcing its Series A of $25 million led by Valar Ventures, but now the company has more than double of what they had in march. To be precise,Kuda now has 1.4 million registered users.

According to Ricardo Schäfer, Partner at Target Global, a venture capital firm that invests in tech companies which was founded in 2012, he said, “We felt that Babs and Musty are ambitious on another level. For them, it was always about building a pan-African bank, not just a Nigerian leader.”

Also, a co-founder of Valar Ventures, Andrew McCormack, said, “Kuda is our first investment in Africa, and initial confidence in the team has been upheld by its rapid growth in the past four months.”

The co-founder also went further “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 are proud to continue supporting them,”

According to the CEO, Kuda’s initial business model was built around providing banking services to people who still held accounts with incumbent banks. But this is gradually shifting as more people are paying in and out of their accounts.

“It’s a unique product, an overdraft that we pre-qualify the most active users for, and 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 added.

We can perceive another unicorn loading in Africa. There are only two companies in Nigeria that are over $1 Billion valuation, Flutterwave and Interswitch. Kuda Bank has joined the league of the hopefuls with the like of TeamApt.

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