Kuda Bank is a Nigerian-operating, London-based startup that offers personalised, mobile-first banking services to Nigerians. It has seen a surge in growth in recent months and has raised additional funding to continue its expansion.TechCrunch confirmed with Kuda that the startup closed a Series B of $55million money via its London entity. This will allow it to launch new services in Nigeria and, in the words and phrases of its co-founder, CEO Babs Ogundeyi to create a new approach to banking services for every African on the planet.Funding was secured at a value of $500 million. This funding comes after impressive early growth.A lot of our resource deployments have been made in Nigeria, within our operational entity. Ogundeyi explained to TechCrunch that they are now doubling down on expansion. The idea is to create a strong team for Kuda's expansion plans. We see Nigeria as a key market and don't want to lose sight of it. It is a competitive market that is strong. We feel it is one we must have a stronghold on. This funding will be used to expand the company and to gain more knowledge in relation to expansion.Kuda now boasts 1.4 million registered users. This is more than twice the number of registered users it had in March, when it had 650,000 users. Kuda revealed this figure when it announced its Series A of $25,000,000 led by Valar Ventures.According to our understanding, this latest Series B was an inside round and came from existing investors. It is co-led by Target Global and Valar Ventures. SBI and other angels are also involved. Kuda wasn't actively raising money when the Series B was launched and ended.Babs and Musty Musty Mustapha (the co-founders and CTO) are ambitious at a higher level, we felt. Ricardo Schfer (a Target partner who led the round), said that it was always about building an African bank and not just one leader in Nigeria. At the outset, I was drawn to the prospect of banking more than 1 billion people.It might be surprising that it has been only four months since Kuda announced the last round of funding. The pace of equity rounds being raised is fast, sometimes in a matter of months, which is partly due to the amount of venture capital available at the moment. If the company is showing the right growth metrics, and is located in a highly desirable area, investors will be more inclined to strike while the iron is still hot. Another example is GoPuff, who last week announced a $1B raise, just months after it had raised a similar round.Neobanks Fintechs are creating a new generation of disruptive banking services based on more modern interfaces. They also have an infrastructure that is based around API-driven embedded financing. This market is expected to grow at a rate close to 50% per year and will be a $723 billion collectively by 2028.We are seeing strong players emerge around the world based on the model Nubank from Brazil, Revolut, N26 in Europe and WeBank in China, Varo, and Chime in America. This is why Kuda, which is being actively adopted, is being viewed as a strong candidate for the role of Africa's last untapped area in banking.For years, the writing was on the wall. McKinsey's 2018 report on Africa's banking industry showed that there was a rise in interest in digital financial services. This would be driven by an evolving middle class and a continuing death for access to financial services for the majority. There are still some 300 million Africans who are not banked. Kuda's service is built on these three fundamental factors.Kuda isn't the only one who builds, raises and grows. Other fintech players include Airtel Africa, Chipper Cash and FairMoney, a payments company.Kuda, however, is unique among neobanks because it is creating its services with its own bank license.This allows the company to be more flexible and quick in creating new products and tweaking existing products. It also gives it credibility in a market where incumbents may be less cautious about new players.Kudas's original business model revolved around offering banking services to people with accounts with other banks. People would receive their salaries into their old accounts and then have them transferred to their Kuda accounts to be used or spent in other ways. Ogundeyi stated that this trend is slowly changing and that more people now pay in and out to their Kuda accounts.Ogundeyi wouldn't say which countries would be Kudas next target. He did however note that Kudas most recent product, Kudas first credit move through an overdraft allowance is a sign for the future.He said that it is a unique product and an overdraft for which we pre-qualify active users. It qualified more than 200,000 users in Q2 and issued credit worth $20 million. He said that the company's 30-day repayment policy has prevented default so far.We use all data that we have about a customer to allocate the overdraft amount based on their activities. Our goal is to not make it a burden to repay.Andrew McCormack, a general partnership at Valar Ventures, co-founded the company with Peter Thiel, James Fitzgerald and James Fitzgerald. He said that the market's still-nascent potential and Kuda's approach to it were the reasons for the company's decision to invest in the startup again.Kuda was our first investment in Africa. Our initial confidence in Kuda has been bolstered by the team's rapid growth over the past four months. We believe Kudas transformational effect on banking in Africa will be scalable because of the young population that is eager to use digital financial services. We are proud to support them.
