Nigerian challenger Kuda Bank raises $25m in Series A funding
Nigerian challenger bank, Kuda, has raised $25 million in Series A funding in a round led by Valar Ventures.
The round is the first time the Peter Thiel-backed VC has invested in an African start-up. The other backer in the fundraising is Target Global, an existing Kuda investor.
Founded in 2017, Kuda bank calls itself “the bank of the free”. It offers a no-fee virtual account and accompanying debit card.
Kuda also promises spending analytics, and an ability to qualify for “quick loans” in the near future.
Customers can set up automatic savings pots and accrue up to 15% yearly interest. Kuda makes its money from broker fees when a user tops up their phone or pays their bills through the app.
The bank is insured by the Nigerian Deposit Insurance Corporation and licensed by the Central Bank of Nigeria.
It uses a core banking system dubbed “Nerve”, which the bank built in-house an deployed in August 2020.
CEO Babs Ogundeyi told TechCrunch last week his bank has more than 650,000 users, and experienced a monthly transaction growth $1.7 billion.
While Nigeria remains Kuda’s only live market, the challenger has plans to expand outwards. First, it aims to target the Nigerian diaspora in the UK. A move into other African countries is also on the table.
“Nigeria is at a tipping point in the adoption of digital banking,” noted Andrew McCormack, a general partner and co-founder at Valar Ventures.
“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.”
Kuda compatriot Flutterwave secured a $170 million Series C funding round earlier this month, pushing it into unicorn status.
Growth-equity firms Avenir Growth Capital and Tiger Global Management LLC led Flutterwave’s latest round, alongside existing investors.
These include Visa – which backed its $35 million Series B – as well as financial services provider FIS, DST Global, and Salesforce Ventures.