Nigeria’s Kuda Bank raises $55 million for expansion and growth

Kuda Bank CEOs - Startup Lagos

In a round led by Valar Venture, Target Global, and Japan-based Strategic Business Investor (SBI) Investment, and other angel investors, Nigeria’s fintech startup, Kuda Bank, the African challenger bank, has recently raised $55 million in Series B funding. With this new secured investment, the startup is looking at branching into other geographical markets in Africa, and launching new product offerings for its growing market in Nigeria. This funding takes the company to over $500 million valuation, after previous successful funding rounds in 2018 ($15,000 pre-seed), September 2019 ($1.6 million pre-seed), November 2020 ($10 million seed round), and March 2021 ($25 million Series A). This takes the total funding raised by the company to over $91.6 million, over a span of 3 years.

Kuda bank originally started operations in 2018 as Kudimoney, by Babs Ogundeyi and Musty Mustapha, as a lending platform before its gradual pivoting into digital banking. Many fintech companies are making inroads into this emerging sector of neobanking, especially with the expanding opportunities in banking the unbanked in Africa. According to Absa Africa, over 2 billion people across the world are unbanked, with an alarming 60% of this number from within Africa. Through neobanking, users are offered a low-cost structure, easy accessibility, and advanced financial services. Many of these fintechs are utilizing a credit-first model, through which users are first offered a credit card or something similar, and then later prompted to activate a bank account.

Following an interview with Techcrunch, Ogundeyi narrates how Kuda’s initial business model is being iterated to meet up with present needs, as users are now able to make payments through their accounts. With the Kuda Bank Overdraft, users are also able to pre-qualify for credit. In Q2 of 2021, over 200,000 users were qualified and about $20 million worth of credit was disbursed. He further narrates that default has been minimal because of the flexibility of the repayment plans for its users. With its model that boasts of free banking, Kuda Bank hopes to win the hearts of a vast number of customers in Nigeria and across Africa. Some of the basic motivations behind the bank were the excessive frustrations that came from undue bank charges.

As Babs Ogundeyi is quoted as saying in an interview with Nairametrics in 2020,

We’re excited to usher in a new era in consumer banking and serve the many Africans, who we believe are frustrated with traditional banks Starting with Nigeria, we’ll launch a new kind of bank with a continued focus on improving our members’ financial lives rather than trying to burden them with hidden fees and excessive charges.

With a lot of African fintechs gaining significant funding this year 2021, and transitioning to neobanking, traditional banks are grapple with huge challenges in the emerging banking sector. In the same vein, many fintechs are looking at making life and banking much more comfortable for users across Africa. This growth across Africa’s geographical markets will help Kuda Bank to increase top-of-mind awareness and its brand presence on the continent. Without a doubt, this will attract even more investment for the company, as well as greater traction for its services.

Related posts

Nigeria shall not live by Fintech alone.


Dat Bike gets another $8M to expand in Vietnam


Qashio, a fintech company based in the UAE, raises $10 million in seed funding.


Kenya has cleared Nigeria's Kora of money laundering and card fraud accusations.

Sign up for our Newsletter and
stay informed

Leave a Reply

Your email address will not be published.

Close Bitnami banner