Nigeria’s Kuda Bank Raises $55M At $500M Valuation

Nigerian FinTech startup Kuda Bank notched $55 million in a Series B funding round at a $500 million valuation as the digital bank seeks to expand into other countries across Africa.

The fresh round of capital was co-led by Valar Ventures and Target Global, with participation from Strategic Business Investor and past angel investors, according to a report.

Target Global Partner Ricardo Schäfer said that Kuda has always been dedicated to “building a pan-African bank, not just a Nigerian leader.”

According to Kuda CEO Babs Ogundeyi, Kuda’s initial business model was originally created to offer banking products that were still with legacy banks, but that has been changing as more people “are paying in and out of their accounts.”

The Kuda Bank Overdraft product is something that the company feels is indicative of what’s to come in the future. “It’s a unique product, an overdraft that we pre-qualify the most active users for,” he noted.

In the second quarter of this year, the bank had over 200,000 qualified users and extended in excess of $20 million in credit, per the report.

“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,” Andrew McCormack, a general partner at Valar Ventures, told Techpoint Africa. “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.”

Kuda Bank originally was incorporated in 2018 as Kudimoney, before becoming Kuda prior to its $1.6 million raise in 2019. The company was founded by Babs Ogundeyi and Musty Mustapha as a lending firm before becoming a digital bank.

The London-headquartered bank raised $25 million in a Series A funding round in March. It also raised $1.6 million in pre-seed funds in 2019 and a $15,000 pre-seed in 2018, bringing its total raise to $91.6 million.

Kuda raised $10 million following a funding round last year that was reportedly among the highest in Africa.