Kuda, a Nigerian fintech start-up, has raised $25 million Series A round led by Valar Venture, a New York-based venture capital firm, co-founded and backed by PayPal co-founder, Peter Thiel.
The investment into Kuda is Valar Ventures’ first foray into Africa, having already backed other well known financial technology firms around the world.
Kuda raised $10 million seed round in November of last year, but has already graduated to Series A with a $25 million round.
Target Global, an European venture capital firm that led Kuda’s last funding, participated in this round.
Five months after the first fund, Kuda has grown its customer base from 300,000 customers to 650,000 customers and processed $2.2 billion in transactions in February 2021 alone from $5.2 million processed in February 2020.
All of this has been achieved just in Nigeria where the company launched as a no-fees, digital-only bank in the second half of 2019 with $1.6million pre-seed funding.
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Kuda said it will use the funding to drive growth in Nigeria and further expand into other select countries in Africa.
The startup, which employs more than 120 employees across office locations in Lagos, London, and Cape Town, plans to speed up customer acquisition, expand leadership roles, and build out new features including a new easy-to-use lending option that the company is currently trialling with select customers.
“At Kuda, we know that the companies which are best able to leverage technology and talent will be the same companies which are best positioned to provide huge numbers of people across Africa with access to a vastly improved financial system that places the customer at its centre,” the Chief Executive Officer and co-founder of Kuda, Babs Ogundeyi, said.
“We recognise the great strides that we have taken to get to the point at which we are now, but even more importantly we recognise just how far we still have to go to achieve our objective of providing every African with access to powerful, appropriate and affordable financial services,” he added.
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“With this in mind, we could not be more pleased that Valar Ventures has decided to come on board and join us on this mission. Their insights and experience in helping advise some of the world’s most successful challenger banks will without doubt be a critical part of our successes going forward.”
General Partner, Valar Ventures, Andrew McCormack, who will be joining the board of Kuda, said Nigeria was at a tipping point in the adoption of digital banking.
He added, “With the rapidly growing, youthful population who are open to new financial alternatives, Kuda is well-positioned to benefit and will transform the landscape of African banking. We are excited to lead their Series A and continue on the journey alongside Kuda.”
