One of the most promising industries to launch a startup is in the digital banking or fintech sector. Untapped markets can become a goldmine for startups that aim to disrupt the banking infrastructure. And that’s what Kuda has experienced over the past couple of months. Read more about Kuda here and how they were able to raise millions for their Series B funding.
Kuda: An Overview
What sparked Babs Ogundeyi and Musty Mustapha to start Kuda? Excessive and inconsistent fees. Fueled to reduce that, they launched the fintech company to develop a savings app. Wanting to make banking easier and more accessible without any charges, the founders aim to change banking for Nigerians all over the world.
Series B Funding and Possible Kuda Expansion
Kuda raised $55M funding for Series B. For Kuda, this funding will be fundamental not only in the creation of new services on their savings app but also in launching it to Africans across the continent. Ogundeyi hopes that their app can become a widely used app for Africans globally.
Expansion is vital for Ogundeyi and his team. He maintains that Nigeria is still a market crucial to their operations, but the funding will also go to expanding efforts.
Back in March 2021, Kuda raised $25M, all thanks to Valar Ventures. Back then, they had only 650K app users, but they doubled that number in August 2021, with registered users around 1.4 million.
This funding round is once again led by Valar Ventures. But Target Global and SBI have also played a role in helping the fintech startup raise $55 million. Target Global leader Ricardo Schäfer believes in the impact that Ogundeyi and Mustapha will have in Africa. But what excited him the most was the idea that 1 billion users would benefit from their app.
Faster Funding Rounds and Other Disruptors
It was surprising how quickly Kuda raised funding over the course of a few months, but it’s due to the current market conditions and the numbers presented to investors. A McKinsey report foresaw this growth, wherein digital financial services would become a major market. Plus, with inaccessibility, Kuda knew that they could change the way Africa could do digital banking.
Kuda isn’t the only fintech startup aiming to change the banking infrastructure in Africa. Other Fintechs changing the game are:
- Airtel Africa
- Chipper Cash
- FairMoney
Meanwhile, here are the other fintech and banking companies also competing to stand out in the market:
- Revolut and N26 (Europe)
- WeBank (China)
- Varo and Chime (U.S.)
- Nubank (Brazil)
However, what makes Kuda stand out from the others is they have a banking license. With this in mind, they can develop services on their own. This will also help them create and develop other products and services and build credibility more than their competitors.
The Future of Kuda
Ogudenyi aims to launch their app to other African countries but won’t say where they’ll launch it. However, Kuda has an ongoing credit service (through an overdraft allowance) that proves the fintech startup is growing and moving forward.
He says that they do a pre-qualification screening for those who can receive credit. In the 2nd quarter of 2021, over 200,000 users were eligible. They gave over $200M in credit. And to ensure they remain with their purpose of creating their app, they do an allocation of overdraft proportion. It’s based on user activities, and they won’t overpay.
Due to Kuda’s promising mission towards banking in Africa, Valar Ventures seems eager to fund the fintech startup once more in the future. Andrew McCormack, a general partner of the investment firm, says that growth and population acceptance towards digital banking are factors in continuing their support.
