Nigeria’s first digital-only bank Kuda, has raised $55 million in a Series B round at a valuation of $500 million. The round was co-led by existing investors Target Global and Valar ventures and backed by PayPal co-founder, Peter Thiel. The latest round is preceded by a Series A round of $25 million which the company announced about five months ago.
Kuda said it plans to use the funds to build on its new services for Nigeria, as well as prepare for a continental expansion. “We’ve been doing a lot of resource deployment 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,” Babs Ogundeyi, Kuda CEO said in a statement.
Kuda began as a savings app but has now grown to become a Central Bank-licensed microfinance bank, with the primary aim of helping Nigerians get the best out of their money without overcharging them. The company was co-founded by Babs Ogundeyi with the now CTO, Musty Mustapha, in 2019.
Today, Kuda is popular for its zero to very minimal transaction fees, which has attracted a handful of individuals to its shores. As of November 2020, Kuda had 300,000 customers and was processing an average of $500 million worth of transactions per month. By March this year, Kuda’s registered users had more than doubled to 650,000. Presently, Kuda has 1.4 million people in its user base.
The company since its launch has witnessed outstanding growth and is praised for features including; free debit card delivery to customers’ locations at no cost, zero card maintenance fee, 25 free transfers to other banks every month, and smart budgets to help users take control of their spending.
“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,” Andrew McCormack, a general partner at Valar Ventures said. McCormack added that Valar Ventures is proud to continue supporting Kuda, whose transformative effect on banking, they believe, will scale across Africa.
Ricardo Schäfer, a partner at Target Global, also compliment the bank’s achievement, “for Babs and Musty, it was always about building a pan-African bank, not just a Nigerian leader. The prospect of banking over 1 billion people from day one really stood out for me at the beginning,” he said.
While the Kuda is currently only present in Nigeria, Co-founder and CEO, Babs Ogundeyi, has said that the company’s vision is to serve all Africans in Africa, as well as outside of it