Kenyan fintech Kwara acquires KUSCCO subsidiary, IRNET Coop; raises $3 million seed extension

Kenyan fintech startup, Kwara, announced that it has acquired IRNET Coop, a subsidiary of Kenya Union of Savings and Credit Cooperatives (KUSCCO LTD) as part of an exclusive digital solutions partnership agreement.

Under the acquisition agreement, Kwara will provide its software solutions and mobile banking channels to help increase growth and profitability of more than 4,000 SACCOs in Kenya.

Founded in 2018 by Cynthia Wandia and David Hwan, Kwara helps turn traditional savings cooperatives into modern digital banks. It has a management solution for cooperative workers to enhance effectiveness and automation, as well as a neobank-style mobile banking app for end clients, and other outlets.

The fintech startup raised $4 million in 2021 in a seed round to build a neobank app that will enable individuals to sign up with their preferred credit unions to access various financial services.

According to Kwara CEO and co-founder Cynthia Wandia, “we have spent the last four years working closely with KUSCCO LTD to uplift the SACCO sector in Kenya. Our clients have grown their deposits and loan books twice as fast as they did before switching to Kwara. We are now grateful for the opportunity to avail those benefits to SACCOs across the entire country. This partnership through acquisition enables us to place fully digital and secure technology in the hands of all SACCO members in the fastest possible time, backed by the most established SACCO partner in Kenya.”

The entire IRNET team will work closely with Kwara to ensure a seamless transition and to embed the entire KUSCCO regional network and marketing expertise into the fintech.

The parties intend to rapidly onboard the entire SACCO fraternity onto the Kwara platform in the next six months.

“This development marks a game changer in the management of SACCOs going forward,” says George Ototo, Group Managing Director of KUSCCO LTD. “The acquisition of IRNET and the KUSCCO-Kwara partnership will deliver to our thousands of SACCO members a tested and proven, secure and efficient cloud-based core banking platform as well as modern mobile banking channels.”

The company also announced that it raised $3 million in seed extension round with existing investors DOB Equity, Globivest and Willard Ahdritz, the founder of Kobalt Music participating. Others participants include new backers One Day Yes, Base Capital as well as fintech executives including Mikko Salovaara, the CFO of Revolut