Nigerian fintech startup, Kuda Bank has raised $55 million in a Series B round at a valuation of $500 million. This comes just a few months after raising a $25 million Series A round.
The funding round was co-led by existing investors Target Global and Valar Ventures, the firm co-founded and backed by PayPal co-founder, Peter Thiel, SBI Investment and a number of previous angels also participated.
Launched in 2019, and headquartered in Lagos and London, Kuda Bank currently provides services for consumers to save and spend money, receive overdrafts (essentially revolving credit for individuals).
As of November 2020, Kuda had 300,000 customers and was processing an average of $500 million worth of transactions per month.
In December 2020, Kuda raised $10 million dollars in a seed round, the largest-ever seed round raised by a startup out of Africa. At the time of the seed round, Kuda had registered 300,000 customers. In March, that figure doubled to 650,000 registered users.
Kuda now has 1.4 million registered users. The digital bank also has over one million downloads on the play store.
In the second quarter of the year, Kuda disbursed $20 million worth of credit to over 200,000 qualified users through its overdraft feature, with a 30-day repayment period. According to Ogundeyi, default has been “minimal” because of the company’s approach. “We 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,”.
The new funding round will be used to double down not just on new services for Nigeria, but to prepare its launch into more countries on the continent.
Babs Ogundeyi CEO of Kuda told TechCrunch. “We’ve been doing a lot. Resource deployment has been in our operational entity, in Nigeria. But now we are doubling down on the 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 stronghold on. So this funding is to invest in expansion and have more experience in the company with relation to expansion.”
What they are saying
Andrew McCormack, a general partner at Valar Ventures said “Kuda is our first investment in Africa and our initial confidence in the team has been upheld by its rapid growth in the past four months. 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 we’re proud to continue supporting them.”
