Babs Ogundeyi, the Co-founder and Managing Director of Kuda Bank, said that venture capital (VC) investments in Nigerian technology companies have slowed down recently compared to pre-pandemic levels.
Ogundeyi, who stated this during an exclusive interview with Nairametrics, explained that the slow-down was caused by the global economic downturn. According to him, the global economy has been bedevilled by various challenges, inevitably affecting how much African tech startups have been able to raise compared to previous years.
He added that the global economic downturn has shown the need for change in strategies, which is why many startups are already adopting cost-cutting approaches.
Opportunities still exist in the tech ecosystem
Speaking further, the Kuda Bank MD emphasised that the recent developments have not taken away the opportunities available in the technology sector in emerging markets like Nigeria. He added that the financial services sector provides a lot of opportunities for investments in the Nigerian economy.
- “The Financial sector is highly regulated, one of the oldest, highly competitive, yet with a lot of opportunities. Despite these challenges, we were able to come in and succeed by making financial transactions simple, and leveraging technology.
- “Over the last 2 years, there have been more FinTechs in the country, because the opportunity is becoming more and more glaring. Some firms are doing payments, others lending, deposits, switching, infrastructure, amongst others,” he said.
The need for innovation
Babs also highlighted the need for players in the financial technology space to constantly innovate and thrive, working as enablers rather than competitors. He noted that the financial service sector is very broad and requires a group of people, focusing on niche areas, working in line with the country’s quest for financial inclusion.
- “Kuda Bank has benefitted from the investments in the Nigerian tech space. When we started in 2019, there weren’t as many foreign investors compared to today. We have been part of the growth and the belief in Nigeria. Our growth has fuelled other technology companies as well, which shows the potential of leveraging technology. A lot of entrepreneurs are coming into this space,” he added.
His take on the future of the Nigerian finTech industry
Babs opined that some of Nigeria’s biggest companies in the nearest future will be digital/tech companies. That’s because he envisages a future where more Nigerians would adopt technology as a way of life. He said:
- “Nigeria has grown significantly in a very short time in terms of human capacity, tech, expertise, training etc. However, the next 10 years will be very pivotal. I believe there is going to be a lot more adoption as technology is growing astronomically.”
- “Nigeria’s population size could double in the next 25 years. Digital transactions have grown significantly. With the increased demand for technology in the country and better internet service, the services will become cheaper.”
Kuda Bank’s plans for the future
He told Nairametrics that the company is in the process of expanding to other African countries like Ghana and Uganda. The company also has its sight set on the United Kingdom. Babs said:
- “When we started, there were not a lot of people in the sector. So, we had the first-mover’s advantage, coupled with our customer-centric services has seen the brand grow over the years. In the space of 3 years, we have grown our customer base to over 4.6 million customers.
- “We are currently looking to expand our services to other countries of the world. Firstly, we are considering Ghana and Uganda as our next markets in Africa, while we are also making the UK our first western launch. Our focus is to be a financial institution for Africans.”
