Kuda, Nigeria’s first mobile-only bank, has secured $25 million in a Series A round led by Valar Ventures, the firm co-founded and backed by Peter Thiel, with Target Global and other unnamed investors participating. This funding will help the company to continue building out its specific ambition: to provide a modern banking service for Africans and the African diaspora.
The digital bank, which was founded in 2018 by Babs Ogundeyi and Mustapha Musty, started as a savings app, but it later transitioned into a challenger bank that helps consumers save and spend money. Like all challenger banks, Kuda continues to make significant advances in attracting customers away from the big incumbents by providing more modern, user-friendly tools to manage their money.
Kuda, which is co-headquartered in London and Lagos, secured a $1.6m pre-seed investment and record-breaking $10m seed round in September 2019 and November 2020, bringing its total funds raised to $36.6m. At the time of the seed round in November 2020, Kuda had registered 300,000 customers: now, that figure has more than doubled to 650,000, and tellingly, that base is spending more money through the Kuda app.
Ogundeyi told TechCrunch that “In November we were doing about $500 million in transactions per month for services like bill payments, card transactions, and phone top-ups. We closed February at $2.2 billion.”
According to Andrew McCormack, a general partner and co-founder at Valar, per TechCrunch, “Nigeria is at a tipping point in the adoption of digital banking.”
“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,” he noted.
Like many other Neobanks, Kuda is transforming the payments space with relevant solutions and opportunities while taping into financial practices that are unique to its market.