Nigerian Digital Bank, Kuda Raises $10m Investment Led by Target Global

Kuda, a Nigerian digital bank has announced that it has raised $10 million investment.

The new funding was led by Target Global, the giant VC out of Europe, with Entrée Capital and SBI Investment also participating, along with a number of other notable individual fintech founders and angels.

The list includes Raffael Johnen (founder of Auxmoney), Johan Lorenzen (founder of Holvi), Brandon Krieg/Ed Robinson (founders of Stash), and Oliver and Lish Jung (angel investors in Nubank, Revolut, and Chime).

Since launching in September 2019, Kuda has acquired around 300,000 customers — first consumers and now also small businesses — and on average processes over $500 million of transactions each month.

Kuda — which is co-founded by Ogundeyi and CTO Musty Mustapha — had raised $1.6 million in a pre-seed round to launch a beta of its service.

Unlike other challenger banks, Kuda does not partner with other banks to manage and back deposits. Instead, it has obtained a microfinance banking license from the central bank of Nigeria.

This means that it manages payments, transfers, issues debit cards (in partnership with Visa and Mastercard). It also, he said, has partnerships with the incumbent bank’s Zenith Bank, Guaranty Trust and Access Bank for people to come in for physical deposits and withdrawals when needed.

“The emergence of digital challenger banks, providing customers with a free, digital and significantly better banking experience compared to services offered by traditional banks, has seen huge success across the globe,” said Dr. Ricardo Schäfer, Partner at Target Global, in a statement.

“Kuda is one of Africa’s leading digital challenger banks and one of the fastest growing fintechs on the continent. We are very excited to be working with Babs, Musty, and the entire Kuda team to further build on the fantastic momentum they have had since inception and support them in taking the company to the next level.” He is joining Kuda’s board with this round.

“Kuda’s relentless drive and ability to execute quickly has allowed it to carve out a highly disruptive business model in the finance and banking industry,” added Avi Eyal, partner at Entrée Capital.