Kuda Bank Raises $55 Million In A Series B Round At A Valuation Of $500 Million To Fund Its International Expansion

Kuda Bank raises $55 million in a Series B round at a valuation of $500 million to fund its international expansion

Kuda, Nigeria's first fully digital bank, has raised $55 million in a Series B funding round to support its international expansion.

According to the company, the most recent funding round was an internal round led by existing investors and valued at $500 million.

Valar Ventures and Target Global co-led the round, which also included SBI and a number of previous angel investors. According to Techcrunch, Kuda was not actively raising capital at the time the Series B round was initiated and closed.

This latest round follows the company's announcement of a $25 million Series A funding round led by Valar Ventures just months ago. Additionally, it comes less than a year after it closed a $10 million seed round led by Target Global.

Kuda bank has now raised a total of $91.5 million in venture capital funding over the last two years.

Over 1.4 million users

The rapid succession of Kuda's equity round follows the digital bank's impressive early growth.

Earlier this year, the company disclosed that it had 650,000 registered users. Kuda now claims to have over 1.4 million registered users, more than double the number in March.

Ricardo Schäfer, a partner at Target who led the latest round, expressed excitement for the work being done by the Kuda founders.

“We felt that Babs and Musty are extremely ambitious. It was always about establishing a pan-African bank, not just establishing a Nigerian leader, for them. The prospect of banking over a billion people from the start captivated me.”

According to Andrew McCormack, general partner at Valar Ventures, Kuda's approach to the market was a factor in the firm's decision to invest in the startup. He continued by stating that the startup's rapid growth over the last four months has bolstered its confidence even more.

Expansion plans

Since rebranding from Kudimoney, a straightforward fintech platform offering standard fintech solutions, Kuda has come a long way.

The Central Bank of Nigeria's (CBN) microfinance banking license aided significantly in its transformation into Kuda, a full-service digital neo bank.

The license distinguishes it from other neo banks because it enables it to be more adaptable and rapid in developing new products.

Its mobile-first, personalized, and cost-effective banking services, which are built on more modern, API-based infrastructure, have aided its growth in recent months.

It recently introduced an overdraft facility, marking its first foray into credit for its users. Babs Ogundeyi, co-founder and CEO of Kuda, says the company has already qualified over 200,000 users for the overdraft and distributed $20 million in credit with a 30-day repayment period.

With the latest round of funding, Babs says the company intends to double down on not only new services for Nigeria, but also on preparing for expansion into additional African countries.

However, the company did not disclose the countries into which it intends to expand outside of Nigeria.

Although it is considering African expansion, Babs maintains a strong focus on Nigeria.

“We continue to view Nigeria as a critical market and do not wish to be distracted, so we do not wish to disrupt those operations excessively. It is a robust and competitive market. It is one that we believe requires a stronghold. Thus, this funding will be used to invest in expansion and increase the company's experience with expansion.”

In conclusion

Kuda's raise demonstrates the impressive growth that African fintechs are currently experiencing, particularly in terms of fundraising. Chipper Cash, a payments company, Airtel Africa, and FairMoney, an online lender, are among the other fintechs that have raised capital.

This demonstrates that significant capital is currently being pumped into the African fintech market.

However, the rapid pace at which Kuda has raised capital demonstrates that the company is exhibiting the right growth metrics that satisfy investors.