Kuda, a startup out of Nigeria that operates a popular mobile-first challenger bank for consumers has announced that it has raised $10 million — the biggest seed round ever to be raised in Africa.
According to report, the funding comes on the back of strong demand for the firm’s services and its ambitions, which it quoted it CEO, Babs Ogundeyi to have said was to become the go-to bank not just for those living on the continent, but for the African diaspora.
“We want to bank every African on the planet, wherever you are in the world,” he said in an interview. It’s starting first in its home market: since launching in September 2019, it has picked up around 300,000 customers — first consumers and now also small businesses — and on average processes over $500 million of transactions each month,” he added.
The $10 million was being led by Target Global, the giant venture capital out of Europe, with Entrée Capital and SBI Investment (once part of SoftBank, now no longer) also participating, along with a number of other notable individual fintech founders and angels.
The list includes Raffael Johnen (founder of Auxmoney), Johan Lorenzen (founder of Holvi), Brandon Krieg/Ed Robinson (founders of Stash), and Oliver and Lish Jung (angel investors in Nubank, Revolut, and Chime).
Prior to this Kuda — which is co-founded by Ogundeyi and CTO Musty Mustapha — had raised $1.6 million in a pre-seed round to launch a beta of its service, and Ogundeyi had said he’s already working on a much bigger Series A. No valuation is currently being disclosed.
In a year where many have been watching the world economy with some trepidation on the back of a raging health pandemic hitting multiple geographies, fintech in Africa has been in the spotlight of late.
Most recently, Paystack — a payments start-up out of Nigeria was acquired by Stripe for over $200 million, making it not only Stripe’s biggest acquisition, but the largest exit-by-acquisition to-date for any Nigerian start-up.
That news followed closely on the heels of Interswitch, another payments start-up, hitting a $1 billion valuation on the back of an investment from Visa.
“Nigeria — currently the biggest single economy in Africa — has also been at the center of a lot of fintech activity, and Kuda has been taking that opportunity by the horns.
“In its case, that has started with building Kuda’s footprint from the ground up. The rise of the challenger bank has been one of the more interesting developments in the world of consumer fintech, with companies like N26, Monzo, Starling, Chime, NuBank and Revolut finding a lot of traction with younger users,” the report added.