Kuda Bank, the Nigerian-based fintech startup, has announced that it has raised $55 million in its Series B funding round that was led by Valar Ventures and Target Global along with other investors.
The company plans to use these new funds for expansion across Africa as it plans to ramp up the team and the features of the platform. The bank has a business model which had planned to scale and the aim right from the start of the bank was to build a platform that could expand across the different countries in Africa rather than building a bank that was specifically tailored to Nigeria.
“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,” said Andrew McCormack, a general partner at Valar Ventures. “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.”
According to its CEO Babs Ogundeyi, the bank was initially started to offer banking products that were still on legacy systems in the older banks but the needs of the users have grown over the last couple of years with the digitalization of banking and users now need ways to make quick pay-ins and payouts which the bank has been able to successfully adapt to.
The company reported that it had over 200,000 qualified users for its new Overdraft product and had extended more than $20 million in credit during the second quarter of the year which shows massive growth of the bank’s services which has been lapped up by its users. It’s this kind of growth that investors would like to see and hence the investments have been pouring in since the seed round of funding.
The bank had also raised $25 million in Series A funding that investors realize the potential in the African region and continue to look for well-placed startups and companies that are in the fintech and payments space which are about to have some explosive growth in the coming years. With the European and Asian markets getting close to saturated with many players and users, companies and investors have been looking towards Africa for their next phase of growth and that is why we are seeing many deals in the Africa region, especially in the fintech space, over the last few months.