- Nigerian startup founder raises $25 million from foreign investors for his digital bank operation
- US-based investor, Valar Ventures, enters the African market for the first time because of Kuda Bank
- Nigerian youths inspired Valar Ventures to invest in Kuda and join the startup's board
Kuda Bank's Nigerian founders have joined the league of Nigerian tech startups securing million-dollar deals in 2021, as the company raised $25 million from Valar Ventures, a New York-based private equity firm.
The new fundraising is a continuation from where Kuda stopped in 2020. Last year November, Kuda closed a deal worth $10 million, but that was at the seed round. Five months after the 2020 deal, the digital bank has secured another round, but this time, in the Series A funding round.
The capital from Valar Ventures is the first investment from the United States company into the African market. Although, the funder wasn't the only venture capital that participated in the Series A round.
Target Global, which is an existing investor in Kuda, also contributed to the fund, alongside some unnamed existing investors. This capital comes four years after Kuda entered the Fintech market as Kudimoney in 2016.
The Nigerian digital bank changed its brand name two years ago to become Kuda Bank offering business-to-business and business-to-customers. As of last year February, Kuda had transacted $5.2 million.
But that figure increased a year after to $2 billion as of February 2021. It has processed transactions for over 600,000 customers in Nigeria. With the new funding, Kuda is eyeing markets outside Nigeria and will be disbursing the capital into selected African markets.
Commenting on the capital raised, the Chief Executive Officer and co-founder of Kuda, Babs Ogundeyi, 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 center.
"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.”
Also reacting to the capital invested in Kuda, Valar Ventures' general partner, Andrew McCormack, stated:
“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.”
The deal will make McCormack a board member of Kuda once the transaction is completed.
Just last week, Flutterwave had secured $200 million from several foreign investors. The fundraising increased the market valuation of the Nigerian payment startup. Its value rose above $1 billion, becoming the first Nigerian unicorn.
Meanwhile, Legit.ng had earlier reported that the Central Bank of Nigeria blamed the Endsars protesters for the drop in foreign investment, stating that it impacted investors' confidence.
Aside from the protest, the apex bank also mentioned some factors that caused investors' confidence to drop.
Fakoyejo Olalekan is a Business and Financial Journalist with over three years of experience in covering finance and business activities within Nigeria and offshore. Prior to joining Legit.ng, he worked at Nairametrics where he wrote financial and investment analysis articles. Olalekan is a resourceful and result-driven journalist with a track record for conducting extensive research and interviews to produce articles that provide different perspectives to market activities.