Kuda, a digital microfinance bank in Nigeria, has raised $1.6 million pre-seed capital with participation from Startupbootcamp, Tolaram Group, and others. Kuda was founded in 2018 by Babs Ogundeyi and Musty Mustapha and was formerly known as Kudimoney. Ogundeyi was an ex-PwC auditor and a former special adviser on finance to the Nigerian Government while Mustapha was a software engineer at Stanbic Bank and holds a PhD, notes Ventureburn. Kuda is “designed for your smartphone, free of ridiculous charges and great at helping you budget, spend smartly and save more.”
Why this constant funding success in the Nigerian fintech sub-sector? Here is the answer – “According to research done by The Fletcher School and Mastercard Center for Inclusive Growth, of the $301 billion of funds flows from consumers to businesses in Nigeria, 98 percent is still based on cash.” Yes, lots of room to redesign cash-based payment in Nigeria.
The part-press release
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If there’s anything I’ve relearned over and over in the many months of hard work leading up to today, it’s that people mean everything to a business and particularly to Kuda.
As all of us at Kuda HQ celebrate the announcement, I’m taking this time to appreciate the team of diverse and highly committed people who have brought our vision of a remarkable banking experience to life. This is only the beginning of our revolutionary journey of innovation.
My appreciation also extends to our backers — those who, with nothing more than faith in a promising concept and our wavering vision to make banking accessible to everyone, put their money behind us. Thank you for believing in Kuda unwaveringly. You made this possible, and we will continue to count on your support as we grow.
I reserve my special gratitude for everyone who bought into Kuda early, bugs included, and trusted us with their money by signing up and using the bank.
As we built the first version of Kuda, we weren’t sure how the public would react, so it’s thrilling to know that thousands of people have opened Kuda bank accounts ahead of our official launch. You all are the best. Please, keep your confidence in us and we’ll keep getting better for you.
We’ll use this money to launch out of beta later this year, our immediate priorities are continuous product improvement and excellent customer support, so the funds we’ve raised will be used to expand our software development and customer support teams and equip them with the best tools available.
It’s back to work for us, not like we ever stopped as we continue to build Kuda into Africa’s best bank.
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The next important question is, who keeps track of performance of the amalgam of fintech entities being launched, with respect how many millions of the unbanked that have been brought into the digital financial space?
If after all the successful fundraising in the fintech space across board, we still report ‘98% of transactions being cash’, then we cannot really say we have succeeded, rather we just created a handful of internet millionaires.
All the fintech companies may end up just competing for the 39 million unique BVNs, with no serious effort to grow the figure to 60 million, plus enhanced financial literacy; we cannot call that financial inclusion in any way.
The same way we clamour for educational institutions that truly liberate minds and build humans, we also need financial institutions that truly make citizens digitally aware, making sure that cash-based transactions are extremely unattractive and stale; while digital payment systems become the first port of call.
Until we align growth and activities with societal transformation, we may never scratch the surface.
“All the fintech companies may end up just competing for the 39 million unique BVNs, with no serious effort to grow the figure to 60 million, plus enhanced financial literacy; we cannot call that financial inclusion in any way” That is the obvious reality indeed.