Nigerian fintech startup Kuda, which is building a pan-African digital challenger bank, has closed a US$10 million seed funding round in order to accelerate its growth and keep up with customer demand.
Launched in 2016 as lending platform Kudimoney, Kuda rebranded in June of last year and received a banking licence from the Central Bank of Nigeria (CBN) to launch a full-service digital bank.
That regulatory approval made Kuda Nigeria’s first and only full-stack and mobile-first bank, and the startup raised a US$1.6 million funding round in September of last year to complete its launch. The bank provides full banking services through its apps, allowing Nigerians to run a current account, save money, and earn annual interest.
Since then, the company has experienced exponential growth, and now serves over 250,000 customers and processes over US$500 million of transactions monthly.
Kuda has now secured a US$10 million seed round led by Target Global with participation from Entrée Capital and SBI Investment, and also involving leading fintech founders and angel investors like Raffael Johnen, Johan Lorenzen, Brandon Krieg, Ed Robinson, and Oliver and Lish Jung.
The proceeds will be used to help accelerate its growth plans and keep up with customer demand. Specifically, funds will be used for key hires, product development, and to expand operations across Africa.
“We are very excited for 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,” said Kuda chief executive officer (CEO) and co-founder Babs Ogundeyi.
Dr Ricardo Schäfer, partner at Target Global, who will also join Kuda’s board, said the emergence of digital challenger banks, providing customers with a free, digital and significantly better banking experience compared to services offered by traditional banks, has seen huge success across the globe.
“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,” he said.