NIGERIA – Kuda, Nigeria’s first digital-only retail bank has raised $1.6 million in pre-seed funding.
According to Babs Ogundenyi, Kuda cofounder, the fintech startup plans to use its seed funds to go from beta to live launch in Nigeria by fourth-quarter 2019.
The startup will also use the funds to build out the technology of its banking platform, including support for its developer team located in Lagos and Cape Town.
“Kuda is the first digital-only bank in Nigeria with a standalone license. We’re not a mobile wallet or simply a mobile app piggybacking on an existing bank,” said Ogundeyi.
The Lagos and London based fintech startup recently launched the beta version of its online mobile finance platform.
“We have built our own full-stack banking software from scratch. We can also take deposits and connect directly to the switch,” Ogundeyi added, referring to the Nigeria’s Central Switch
The Nigerian Central Switch is nigeria’s version of the Society for Worldwide Interbank Financial Telecommunications (SWIFT) system.
SWIFT is a vast messaging network used by banks and other financial institutions to quickly, accurately, and securely send and receive information, such as money transfer instructions.
Kuda plans to offer competitive financial services to attract more customers into its platform.
Some of the incentives to attract customers include, checking accounts with no monthly-fees, a free debit card, and plans to offer consumer savings and P2P payments options.
“We look to be the next generation bank where you can do everything— savings, payments and transfers — and also the one that’s least expensive,” Ogundeyi said.
“You can open a bank account within five minutes, do all the Know Your Customer (KYC) in the app, and you get issued a new bank account number,”
Kuda has also partnered with three of Nigeria’s largest financial institutions: GTBank, Access Bank and Zenith Bank to facilitate customer transactions.
Kuda customers can thus use these banks’ branches and ATMs to put money into bank accounts or withdraw funds without a fee.
According to Ogudenyi, the partnership has enabled the fintech startup to have the largest branch network in the country even though in reality, it does not even a single branch.
Babs Ogudenyi co founded Kuda in 2018 with Musty Mustapha, former Stanbic Bank Software developer.