Kwara, an East African fintech based in Kenya has closed its seed funding round at $4 million. The funding round was led by venture capital firm Breega and saw the participation of several investors such as SoftBank through its SoftBank Vision Fund Emerge, New General Market Partners, Globivest, Do Good Invest, Finca Ventures, Rabacap, Launch Africa, Future Africa, Samurai Incubate, DOB Equity, Norrsken Impact Accelerator, and the participation of angel investors.
Launched in 2019 by Cynthia Wandia and David Hwan, Kwara helps credit unions – savings and credit cooperatives societies known as SACCOs, in Kenya to make the shift to digital options by providing them with back-end-as-a-service (BaaS) software that makes the whole operations they are characterized by easy and convenient.
In the past year, amid the challenges caused by the pandemic, Kwara expanded into South Africa and the Philippines. There was an increase in the demand for its services seeing how efficient its platform was. According to co-founder and CEO Cynthia Wandia, the startup has always known from its inception that it would expand beyond Kenya based on its products. She mentioned that the startup is leveraging the fact that most credit unions, especially those situated in emerging markets, had still not incorporated technology into their operations. Kwara took a step further by forming strategic partnerships with some companies; this helps with providing third party services via its platform. Recently, it brought on board Lami Technologies which is an insurance startup based in Kenya. The plan is to make accessible insurance products that range from business, health, property, and even life assurance.
Kwara’s app is still in its beta testing stage. According to co-founder and COO David Hwan, the beta version of Kwara’s app has been tested for feasibility and has an uptake of between 60 and 90 percent. “The app gives power to the members, who have the ability to view and download their financial statements, apply for loans and make repayments. By giving power to the members, we are extending the freedom that credit unions need to focus on their core business or more value-added tasks”, he said.
One of Kwara’s biggest aims is to triple the number of credit unions using its platform from 150 by the end of next year. Currently, it is serving 60,000 members in savings and cooperative unions and aims to increase that number to 100,000 by the end of next year. By 2030, it is looking at serving 1 billion individuals. For now, Kwara continues to make significant upgrades and/or inclusions to prepare its app for a full launch next year.
Speaking on the startup’s progress, Breega’s founding partner Ben Marrel said that “Over the years, we’ve seen an increasing interest in how to build wealth through community, as well as a shift in consumer preferences towards digital-first banking. Kwara’s unique approach is a catalyst for a new way of retail banking through digital-first credit unions”.
“We want to make credit unions as efficient as they can be by giving their members the kind of neobank experiences they wish to have,” Kwara co-founder and CEO, Cynthia Wandia mentioned. Kwara promises to provide credit unions and their users with a handful from tracking their financial flows, to accessing other financial services.
Kwara claims that its existing clients have witnessed membership growth of more than 19 percent, adding that it has supported transactions worth $40 million between credit unions and their members.
“We are building the infrastructure and rails for the credit unions and their members to connect to everything that’s already out there”, David Hwan said.
When Kwara fully launches by next year, it promises to give banks, who have not provided credit unions with all the support they need, a run for their money.