NIGERIA – Kuda Bank, Nigeria’s first fully digital bank, has announced that it has raised US$10 million in seed funding representing the largest seed fund to be raised by a tech company in Africa.
The funding round was led by Target Global, the giant VC out of Europe, with Entrée Capital and SBI Investment (once part of SoftBank, now no longer) also participating, along with a number of other notable individual fintech founders and angels.
The individuals include Raffael Johnen (founder of Auxmoney), Johan Lorenzen (founder of Holvi), Brandon Krieg/Ed Robinson (founders of Stash), and Oliver and Lish Jung (angel investors in Nubank, Revolut, and Chime).
Since launching in September 2019, Kuda Bank, has picked up around 300,000 customers, first consumers and now also small businesses, and on average processes over US$500 million of transactions each month.
“We are very excited to be working with Babs, Musty, and the entire Kuda team to further build on the fantastic momentum they have had since inception and support them in taking the company to the next level.”Dr. Ricardo Schäfer – Partner at Target Global
Prior to this Kuda, which is co-founded by Babs Ogundeyi and CTO Musty Mustapha, had raised US$1.6 million in a pre-seed round to launch a beta of its service, and Ogundeyi said he’s already working on a much bigger Series A.
“We have built the core banking services in-house so we own the full stack. It means we don’t have to piggyback on another financial institution. We may choose to partner on certain products, but we don’t have to,” CEO Babs Ogundeyi said.
“We will possibly partner in others where the existing infrastructure makes it more logical to do so. The reason for the full license is monetization. Like a bank, you need to be able to lend, and in Nigeria, if you don’t have a full license it’s hard to lend and make money.”
According to CEO Babs Ogundeyi, the funding comes on the back of strong demand for its services and its ambition to become the go-to bank not just for those living on the continent, but for the African diaspora.
“The emergence of digital challenger banks, providing customers with a free, digital, and significantly better banking experience compared to services offered by traditional banks, has seen huge success across the globe,” said Dr. Ricardo Schäfer, Partner at Target Global who’s joining the Kuda Board, in a statement.
“Kuda is one of Africa’s leading digital challenger banks and one of the fastest-growing fintech on the continent. We are very excited to be working with Babs, Musty, and the entire Kuda team to further build on the fantastic momentum they have had since inception and support them in taking the company to the next level.”
Kuda Bank is one of Nigeria’s few challenger banks. The process payments, transfers, issue debit cards (in partnership with Visa and Mastercard).
They also have partnerships with the incumbent bank’s Zenith Bank, Guaranteed Trust, and Access Bank for people to come in for physical deposits and withdrawals when needed.
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