Nigeria: Peter Thiel's Valar Ventures invests in digital-only bank
Kuda Technologies, a full-service, digital-only bank, has announced a $25 million series A funding round led by New York-based venture capital firm Valar Ventures. The investment into Kuda is Valar Ventures’ first foray into Africa, having already backed other well known financial technology firms around the world. The fund, which was founded by Peter Thiel, has previously invested in Germany’s N26, the UK’s Wise and Mexico’s Albo.
The round also includes participation from existing investor Target Global, an international venture capital firm headquartered in Berlin, and several other existing investors. The $25 million funding raise follows on from the $10 million Kuda raised in October 2020, the largest ever seed round to be raised in Africa.
Founded in Nigeria by Babs Ogundeyi and Musty Mustapha in 2019, Kuda has offices in London, Cape Town, and Lagos – where it operates as Kuda Microfinance Bank under license from the Central Bank of Nigeria.
Since launching in September 2019, Kuda, a full-service, licensed, challenger bank, has grown to provide B2C and B2B banking services to over 600,000 customers in Nigeria and processed over $2 billion in transactions during February 2021, up from $5.2 million in February 2020. Kuda will use the proceeds to drive growth in Nigeria and further afield into other select countries in Africa.
Babs Ogundeyi, CEO and co-founder of Kuda said, “At Kuda, we know that the companies which are best able to leverage technology and talent will be the same companies which are best positioned to provide huge numbers of people across Africa with access to a vastly improved financial system that places the customer at its centre. We recognise the great strides that we have taken to get to the point at which we are now, but even more importantly we recognise just how far we still have to go to achieve our objective of providing every African with access to powerful, appropriate and affordable financial services. With this in mind, we could not be more pleased that Valar Ventures has decided to come on board and join us on this mission. Their insights and experience in helping advise some of the world’s most successful challenger banks will without doubt be a critical part of our successes going forward.”
Commenting on behalf of Valar Ventures, general partner Andrew McCormack said, “Nigeria is at a tipping point in the adoption of digital banking. With the rapidly growing, youthful population who are open to new financial alternatives, Kuda is well-positioned to benefit and will transform the landscape of African banking. We are excited to lead their Series A and continue on the journey alongside Kuda.” McCormack will join the board of Kuda Technologies following the conclusion of the funding round.
Target Global’s Dr Ricardo Schaefer added that, “Kuda has done a phenomenal job in building one of Africa’s most promising and fastest-growing fintech companies and we are very excited to have Valar Ventures join the board.”
With its principal operations in Nigeria, currently the biggest single economy in Africa, Kuda has seized on the opportunity to build a digital-only mobile bank that its customers love to use. The company employs more than 120 employees across three office locations: London, Lagos and Cape Town. With a microfinance banking licence in Nigeria, custom-built banking technology and no physical branch network, Kuda has redesigned banking for the Nigerian landscape and is available to customers via its top-ranked Android and iOS apps.
The fresh infusion of capital will be used to speed up customer acquisition, expand leadership roles, and build out new features including a new easy-to-use lending option that the company is currently trialling with select customers.
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