Nigeria’s first mobile-only bank licensed by the central bank of Nigeria, Kuda Bank announced it has secured a $55 million Series B funding round at a valuation of $500 million.
According to a blog post by TechCrunch, the London-based, Nigerian-operating startup closed a Series B of $55 million funding via its London entity to expand it’s digital banking services into other African countries. This indicates continued confidence in Kuda bank – ‘Bank of the free’ by investors, after raising a $25 million Series A round in March 2021.
The latest series B round coming from existing investors was co-led by Target Global and Valar Ventures, the firm co-founded and backed by PayPal co-founder, Peter Thiel. It also includes SBI Investment and a number of previous angels also participating.
Co-founder and CEO Babs Ogundeyi told TechCrunch in an interview, “We’ve been doing a lot of resource deployment … in Nigeria. But now we are doubling down on 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 strong hold on. So this funding is to invest in expansion and have more experience in the company with relation to expansion.”
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Ogundeyi would not say which countries kuda bank would be expanding to but he did note that, the overdraft allowance which is one of its most recently launched unique product is a sign of the things to come. This is one of the company most successful product, unveiled after their Serie A raise. This platform became an instant hit as it immediately resonated with the mass market and qualified over 200,000 users and pushed out $20 million worth of credit with a 30-day repayment.
“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,” Ogundeyi said.
Andrew McCormack, a general partner at Valar Ventures who co-founded the firm with Peter Thiel and James Fitzgerald, explaining the reason behind its decision to invest in the startup another time 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,” he said. “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.”
Nigerian fintech startup Kuda— a digital-only retail bank has progressively grown with number of registered users recorded as 1.4 million, which is more than double the number it had in March when it had 650,000 registered users. As of November 2020, the platform has processed over an average of $500 million worth of transactions per month.
