Kuda Bank, the digital-only bank with a microfinance banking license from the Central Bank of Nigeria (CBN) has raised $10 million in seed investment. Founded by Babs Ogundeyi and Mustapha Musty in 2016, it started out as Kudimoney, online-only savings and lending platform and then metamorphosed into a digital-only bank after it received a license from the CBN in 2019.
The round was said to be led by Target Global, Entrée Capital and SBI Investment. Other notable individual fintech founders and angel investors who participated include Raffael Johnen, Johan Lorenzen, Brandon Krieg/Ed Robinson, as well Oliver and Lish Jung — angel investors in Nubank, Revolut, and Chime, according to TechCrunch.
"Nigeria has the potential to be a great national economy if it’s well harnessed. Tech is contributing significantly to that. That is why there is a lot of interest and why we are excited to be there." – @Babsogundeyi https://t.co/eG4gvEnKHj
— Kuda (@kudabank) November 10, 2020
This new investment comes over a year after the digital bank raised $1.6 million in pre-seed funding. At the time, the pre-seed funding was considered to be the highest for a Nigerian startup. According to reports, the CEO noted that the digital-only bank was going to use the funds to do a live launch in Nigeria by Q4 2019.
The Nigerian fintech industry appears to be gaining more global attention considering that the new seed investment for Kuda Bank is coming barely a month after Paystack, another prominent fintech company in Nigeria was acquired by Stripe for a deal of about $200 million. This acquisition is said to be the largest for any Nigerian startup to date.
Kuda Bank, without a physical location, enables users to send money to any bank in Nigeria, withdraw and deposit. It also give users free debit card with a zero card maintenance fee.
In a bid to give its customers access to Kuda debit cards and also allow them to make physical deposits as well as withdrawals, the digital bank partnered with three banks in Nigeria — Guaranty Trust Bank (GTB), Access Bank and Zenith Bank.
Interestingly, Kuda Bank has over 300,000 customers consisting of individual consumers and small businesses while it also boast of processing over $500 million of transactions every month on the average.
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