Kuda, a Nigerian digital bank, has raised $10 million in a seed round led by Target Global as well as participation from Entrée Capital and SBI Investment.
The funding comes on the back of strong demand for its services and its ambitions, according to CEO Babs Ogundeyi.
Ogundeyi says the move is to become the go-to bank not just for those living on the continent but for the African diaspora.
“We want to bank every African on the planet, wherever you are in the world,” he said in an interview.
Since August 2019, we've been about people, love and free banking.
Thank you for your faith in us. We're here because of you and we'll keep going because of you.
💜 from the Kuda team. pic.twitter.com/PeGUVUCaQG
— Kuda (@kudabank) November 10, 2020
Since launching in September 2019, Kuda has picked up around 300,000 customers — first consumers and now also small businesses — and on average processes over $500 million of transactions each month, the company said.
The funding is said to be the biggest seed round ever to be raised in Africa. It reaffirms the African continent as one of the fastest-growing regions when it comes to mobile growth, and financial technology companies that are building services to meet that rapidly-expanding market are getting a lot of attention.
As digital inclusion has become synonymous with financial inclusion, it creates better opportunities for SMEs to play. There’s also a large market as the population begins to adopt mobile technology, spike up demands, and competition is relatively sparse.
With the latest funding round, Kuda will now join startups that have scaled through the pandemic to evolve and scale further. For instance, Paystack — a payments startup out of Nigeria — got acquired by Stripe for over $200 million, making it not only Stripe’s biggest acquisition but the largest exit-by-acquisition to-date for any Nigerian startup. That news followed closely on the heels of Interswitch, another payments startup, hitting a $1 billion valuation on the back of investment from Visa.
But in truth, startups focused around the business of financial transactions — including e-commerce giant, Jumia, (the first venture-backed startup out of the region to go public) been some of the most eagerly-watched, and their services mostly widely-adopted, of all tech plays in the region.