Nigeria's first mobile-only bank Kuda Technologies Ltd. has raised USD 55 million in a Series B financing round at a valuation of USD 500 million via its London entity. The bank said the funds will be used to expand operations with cheaper and customized services and to prepare for its launch in other African countries.
Led by existing investors Valar Ventures, and Target Global, the funding round also saw the participation of several previous angel investors. This round has taken place four months after the bank raised USD 25 million in Series A funding.
Established in 2018, Kuda bank was founded by Musty Mustapha and Babs Ogundeyi and is headquartered in Lagos and London. Licensed by the Central bank of Nigeria, Kuda is a microfinance bank and currently has 1.4 million registered users.
Ogundeyi believes Kuda’s primary business model was built to provide banking services to people who still held accounts in incumbent banks. But this has been shifting gradually as more people are opting to pay in and out of their Kuda accounts.
Thus, banking in Kuda can become fast-moving and flexible with regards to launching new products, rewarding the company with credibility.
Beyond just the usual financial services, Kuda Bank offers credit to its users by way of an overdraft allowance. It disbursed USD 20 million worth of credit to over 200,000 qualified users via its overdraft feature in the second quarter of the year with a 30-day repayment period.
General partner at Valar Ventures, Andrew McCormack believes that Kuda’s transformative effect will be revolutionary with the emerging youth moving towards digital financial services.
A report on African banking in 2018 revealed a sharp rise in interest for financial services in Africa, as well as significant room for growth with over 300 million people still unbanked, and Kuda has built its service structure just to cater to this.
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