Kuda, a London-based, Africa-focused challenger bank, has raised $55 million in a Series B funding round which was made at a valuation of $500 million
According to news report by TechCrunch, Kuda achieved its latest feat with its registered users rising to 1.4 million, up from about 700,000 users in March.
An analysis of the latest round of investors in the bank showed that substantial part of the funding round came from existing investors, co-led by Valar Ventures, Target Global, SBI and several angel investors.
The online medium further reported that the startup lender planned to use the latest $55 million to introduce new services for Nigeria, but to prepare its launch into more countries on the continent.
Kuda’s co-founder and CEO, Babs Ogundeyi, was quoted by TechnCrunch during an interview as saying that the startup plans to build a new take on banking services for “every African on the planet.”
He said: “We’ve been doing a lot of resource deployment … in Nigeria. But now we are doubling down on expansion and the idea is to build a strong team for the expansion plans for Kuda.
“We still see Nigeria as an important market and don’t want to be distracted so don’t want to disrupt those operations too much. It’s a strong market and competitive. It’s one that we feel we need to have a strong hold on. So this funding is to invest in expansion and have more experience in the company with relation to expansion”, Ogundeyi added.
At the end of the latest round, Kuda had cumulatively raised $91.5 million in total over five rounds since 2018.
Founded in 2017, Kuda calls itself “the bank of the free” and has been offering a no-fee virtual account and accompanying debit card. It also promises spending analytics and an ability to qualify for “quick loans” in the near future.
According to the challenger bank, customers can set up automatic savings pots and accrue up to 15% yearly interest. Kuda makes its money from broker fees when a user tops up their phone or pays their bills through the app.
The bank is insured by the Nigerian Deposit Insurance Corporation (NDIC) and licensed by the Central Bank of Nigeria (CBN). It uses a core banking system dubbed “Nerve”, which the bank built in-house and deployed in August 2020.
While Nigeria remains Kuda’s only live market, the startup bank has plans to expand outwards. By its expansion plan, it first aims to target the Nigerian diaspora in the UK following which it intends to move into other African countries.