London-based, Nigerian-operating startup Kuda Bank has closed a Series B round of $55 million at a valuation of $500 million. It plans to scale its new services for Nigeria and expand into more countries on the continent. The latest Series B according to TechCrunch, was a relatively quick inside round — that is, it’s coming from existing investors. Co-led by Valar Ventures and Target Global includes SBI and several previous angels also participating.
“We felt that Babs and Musty” — Musty Mustapha, the co-founder and CTO — “are ambitious on another level. For them, it was always about building a pan-African bank, not just a Nigerian leader. The prospect of banking over 1 billion people from day one really stood out for me at the beginning.” Ricardo Schäfer, the partner at Target who led the round for the firm
Andrew McCormack, a general partner at Valar Ventures who co-founded the firm with Peter Thiel and James Fitzgerald, said that the still-nascent potential of the market and Kuda's approach were behind its decision to invest in the startup another time.
"Kuda is our first investment in Africa, and our initial confidence in the team has been upheld by its rapid growth in the past four months," he said. "With a youthful population eager to adopt digital financial services in the region, we believe that Kuda's transformative effect on banking will scale across Africa, and we're proud to continue supporting them."
Although Kuda Bank is London-based, it was set up in Nigeria in 2018 as KudiMoney by the current CEO AND CTO, Babs Ogundeyi and Musty Mustapha, respectively, with its Nigerian Headquarters in Lagos. The Startup has experienced significant growth since its inception in Nigeria. It started as an internet-only savings and lending platform, rendering services to people who held accounts with traditional banks.
However, in June 2019, they transitioned into a digital bank. They were given a banking license from the CBN to launch as a full service digital-only, "no-fee" bank, with an aspiration to reach all Africans through affordable, accessible and rewarding banking services. It secured $1.6 million in pre-seed funding in the same year and grew its customers to over 300,000 and monthly transactions worth $500 million over a year later.
The Series B round is Kuda's second seed round in less than six months. The Neobank, in March, closed a $25 million Series A round which Valar Ventures led. This implies that the total investment in Kuda within this period is $80 million.
As of March this year, the company claimed that its customer base stood at 650,000 registered users. Presently, the number of registered users stands at 1.4 million, more than double its March 2021 figures, with over 1 million downloads of its mobile app on the Google play store.
Nigeria in focus
GDP: $432.294 billion in 2020 compared to $448.12 billion in 2019
Population: 206,139,587 in 2020 compared to 200,963,03 in 2019
GDP per capita: $2,097 in 2020 compared to $2,229 in 2019