Kudabank Raises $10 Million to Keep Building Africa’s Best Bank

kudabank image
Image: Tech Crunch

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Nigerian fintech startups seem to be leading the African market. Recently Kuda bank, which is Nigerian first digital bank, raised a whopping $10 million seed fund. This is currently the biggest seed fund ever raised by a fintech startup in African.

Kuda bank which regards itself as “the bank of the free” started operation in 2016 as Kudimoney, by offering customer two basic services:

  • Savings
  • Lending

These services they offered via their mobile app. Because of the ease and efficiency in their transaction, Kudimoney quickly gain prominence and experienced fast growth.

The rebranding of Kudimoney to Kuda bank was followed by them getting a microfinance banking license from the Central Bank of Nigeria (CBN) in 2019.  This was in line with the vision of the CEO of Kuda, Babs Ogundeyi, to make the bank’s service available to every African on the planet regardless of where they live.

Propelled by this vision, they were able to raise their first seed fund of $1.5 million in 2019.  With this, they launched the first fully digital no-fee bank in Nigeria.  With full banking services such as payments options, deposits and withdrawals, loan etc.

Some of the plus values of their services are:

  1. They offer 15% annual interest
  2. There is  no bank charges
  3. They offer Visa and Mastercard, so you can withdraw from any ATM point
  4. They have partnership with prominent banks like Zenith, GTB and Access Bank, to enable their customers make bank deposits and withdrawals.

This year, 2020, Kuda launched it web feature which enables customers, which as consumers and small businesses, to track their money in real-time.

Again, in 2020, they have added another achievement by raising $10 million seed fund.  However, this was made possible by Target Global, one of Europe big VC, together with Entrée Capital, SBI Investment and some other foreign and angel investors and fintech founders. 

When asked about this $10 million funding round, the CEO of Kuda, Babs Ogundeyi said:

We are very excited about Kuda’s next phase. It is a great validation of our business model and rapid growth to date – to have the support of both Europe’s leading fintech investors and founders of successful global technology businesses. Their financial backing and support will only benefit Kuda and our customers.”

Babs Ogundeyi.

Also, a partner at Target Global, Dr. Ricardo Schäfer, who will now be a part of Kuda’s board, had this to say,  “Kuda is one of Africa’s leading digital challenger banks and one of the fastest-growing Fintechs on the continent. We are very excited to be working with Babs, Musty, and the entire Kuda team to further build on the fantastic momentum they have had since inception and support them in taking the company to the next level.”

Currently Kuda has over 350,000 customers and in a month, they processes over US$500 million in transactions.

When asked on how they have been able to achieve all this in a short time, Kuda CEO, Babs, said, “We have built the core banking services in-house so we own the full stack, It means we don’t have to piggy back on another financial institution. We may choose to partner on certain products but we don’t have to.”

He added that they have plans to get full license. According to him, this is because of monetization. He further said, “As a bank you need to be able to lend, and in Nigeria if you don’t have a full license it’s hard to lend and make money.”

It is obvious that Kuda aims to rule the African fintech market, and for the main time, they are probable doing so. But the question is for how long, as the fintech industry in African especially Nigeria is rapidly growing and you never know the next big thing to come up.

Tony Akpan
Tony Akpan is a media professional with over 10 years of experience in media and marketing. He has worked in several TV stations and currently run his own private media outfit. He is also a writer and has written several articles for various online blogs and sites.