Nigerian fintech startup, Kuda Bank, has raised $55 million in a Series B investment round at a valuation of $500 million. This comes after a recent Series A of $25 million announced by the company just a little over four months ago.
The latest round was co-led by existing investors Target Global and Valar Ventures, the firm co-founded and backed by PayPal co-founder, Peter Thiel. SBI Investment and other previous angels also participated.
Kuda plans to use the funds to build on its new services for Nigeria as well as prepare for a continental expansion. According to Co-founder and CEO Babs Ogundeyi, Kuda aims to build a new take on banking services for “every African on the planet.”
“We’ve been doing a lot of resource deployment has been in our operational entity, in Nigeria. But now we are doubling down on the expansion and the idea is to build a strong team for the expansion plans for Kuda,” Ogundeyi explained to TechCrunch in an interview. . “We still see Nigeria as an important market and don’t want to be distracted so don’t want to disrupt those operations too much. It’s a strong market and competitive. It’s one that we feel we need to have a stronghold on. So this funding is to invest in expansion and have more experience in the company with relation to expansion.”
“For Babs and Musty, it was always about building a pan-African bank, not just a Nigerian leader,” said Ricardo Schäfer, the partner at Target Global. “The prospect of banking over 1 billion people from day one really stood out for me at the beginning.”
Ogundeyi co-founded Kuda with the now CTO, Musty Mustapha, in the second half of 2019. The startup launched in Nigeria as a no-fees, digital-only bank with $1.6 million pre-seed funding. It has since witnessed significant growth.
As of November 2020, Kuda had 300,000 customers and was processing an average of $500 million worth of transactions per month.
By March this year, Kuda’s registered users had more than doubled to 650,000, after the startup processed $2.2 billion a month earlier. Presently, Kuda has 1.4 million people in its user base.
Beyond just basic financial services, Kuda now offers credit to its users by way of an overdraft allowance, which the company pre-qualifies the most active users for.
In the second quarter of the year, Kuda disbursed $20 million worth of credit to over 200,000 qualified users, with a 30-day repayment period.
According to Ogundeyi, Kuda has seen “minimal” default because of its approach. “We use all the data we have for a customer and allocate the overdraft proportion based on the customer’s activities, aiming for it not to be a burden to repay,” he said.
“Kuda is our first investment in Africa and our initial confidence in the team has been upheld by its rapid growth in the past four months,” said Andrew McCormack, a general partner at Valar Ventures. “With a youthful population eager to adopt digital financial services in the region, we believe that Kuda’s transformative effect on banking will scale across Africa and we’re proud to continue supporting them.”
Nigerian Energy Startup Secures $2M Investment From Shell-Owned Fund
Nigerian startup Infibranches Technologies, which helps solar energy providers manage their operations and receive payments, has secured US$2 million funding from All On, an impact investment company backed by oil major Shell.
Founded in 2019, the Lagos-based Infibranches has developed two flagship products – OmniBranches and Green Energy Plug – that help companies with large distribution networks, particularly solar home system distributors and mini-grid developers, manage their operations.
OmniBranches is a management platform with features that include agent hierarchy management, commission tracking, transaction records, transaction analytics, and profile management, while Green Energy Plug is a single point of integration for payments and other financial services for service providers in the Nigerian renewable energy sector.
So far the company has served over one million customers and processed over US$120 million in transactions, and the US$2 million All On investment will be used to support the next stage of its growth by financing inventory, agent acquisition, and product and technology development, as well as providing working capital for Infibranches’ plans to distribute solar home systems for households and commercial users across Nigeria, with a special focus in the Niger Delta.
“Through this investment, Infibranches plans to speed up customer acquisition in its current markets. This will also improve existing products like Omnibranches, which has served over a million customers and introduce new products and services to address energy distribution issues,” said chief executive officer (CEO) Olusola Owoyemi.
Dr Wiebe Boer, chief executive of All On, commended Infibrances for its innovative business model that solves payments and collections problems solar system distributors and mini-grid developers face across Nigeria.
“This partnership merges fintech and renewables in a way we haven’t seen in Nigeria before and will enable tens of thousands of new electricity connections,” he said.
Releaf Secures $4.2M in Seed Funding Plans To Drive Industrialisation of Food Processing in Africa
Nigerian agritech start-up, Releaf, has just announced a $2.7 million seed funding led by Samurai Incubate Africa, Future Africa and Consonance Investment Managers with participation from Stephen Pagliuca, Chairman of Bain Capital and Justin Kan (Twitch).
In addition to the seed round, Releaf also secured $1.5 million in grants from The Challenge Fund for Youth Employment (CFYE) and USAID.
The seed funding will enable the development of industrial food processing technology in Nigeria’s smallholder-driven Oil Palm sector, while the grant will enable Releaf to provide working capital and other value-added services for smallholders and small-scale processors. Grant funding will support the training, recruitment and retention of more women and youth in Nigeria’s Oil Palm sector by creating both digital and technical jobs.
Nigeria’s oil palm industry is dominated by smallholder farmers, with 80 percent of the local market share. However, production rates are low because many still rely on inefficient processes for de-shelling, including the use of rocks and inappropriate hardware. These ineffective processes also lead to low-quality palm kernels, largely unfit as input for high-quality vegetable oil manufacturing. As a result, food factories are unable to purchase these raw materials and operate significantly under capacity. On average, food factories have 3X more installed capacity than utilisation, which impacts the cost of food and further investment into processing capacity.
Releaf acts as a bridge between smallholder farmers and food manufacturing companies with its proprietary patent-pending machinery, Kraken. Kraken can process any quality of palm nut into premium quality (95 percent purity) inputs for food factories. Releaf’s software connects the start-up to more than 2,000 smallholder farmers, ensuring consistent, large-scale supply. While palm kernel oil production is not foreign to Nigeria, Releaf’s technology and scale mean it can process 500 tonnes of palm nuts per week. The software offerings also allow the start-up to receive inbound supply requests from farmers via USSD, provide working capital financing, and collect proprietary data on supply availability.
Speaking about the new funding, Ikenna Nzewi, CEO and co-founder of Releaf, said, “our mandate is to industrialise Africa’s food processing industry. This round of funding enables us to develop and prove our technology with smallholder farmers in the oil palm sector. Given Nigerians spend ~60 percent of their income on food and Africa’s population is set to increase by 100,000 people per day over the next three decades, we’re presented with an incredible opportunity to feed more people, reduce consumer costs, and supply the fastest-growing food market in the world. Releaf is committed to harnessing technology to accelerate the economic wealth of rural, agrarian societies throughout the Continent. We firmly believe that a robust real economy is the foundation for long-lasting and shared prosperity for Africans and are excited to deepen partnerships with like-minded organisations, governments, and firms.”
Rena Yoneyama, Managing Partner at Samurai Incubate Africa who led the round, commented, “Releaf’s novel approach to operating within the value chain with proprietary technology set it aside from many agritech startups we have spoken about to. We believe the firm’s thesis on decentralizing food processing would strongly match Africa’s economic development landscape for the next few decades. Ikenna and Uzo are the perfect founders to disrupt this market in Nigeria and beyond. We are thrilled to back them as they innovate in providing both agro-processing and financial services to rural communities and farmers.”
Iyin Aboyeji, General Partner at Future Africa noted, “more than 50% of the goods in supermarkets globally contain glycerine – an extract made from palm oil – a cash crop that is passed down from generation to generation. The team at Releaf is building the agro-allied industry of the future from the ground up, starting with palm oil which they have developed a novel technology to aggregate, deshell and process into critical ingredients like vegetable oil and glycerine. Future Africa is delighted to back Releaf to build the future of modern agriculture.”
Dr. Nneka Enwonwu, Country Relationship Manager, from The Challenge Fund for Youth Employment (CFYE), said, “We are thrilled to partner with Releaf on their mission to improve efficiency and profitability for farmers and food factories in Africa. The founders’ vision and the team’s enthusiasm gave us confidence that Releaf will deliver real value for rural communities and create digital/technical jobs for women and youth. We are looking forward to their results and success over the coming years and continuing to support their work.”
54gene closes $25M Series B to Advance Global Drug Discovery Capabilities
African genomics startup 54gene has secured $25M in a Series B round, led by Cathay AfricInvest Innovation Fund. The round also included participation from Adjuvant Capital, KdT Ventures, Plexo Capital, Endeavor Capital, Ingressive Capital and others. This round brings the company’s total investment to date to more than $45M since being founded in 2019.
The new capital raised will be deployed to expand 54gene’s capabilities in sequencing, target identification and validation, and precision medicine clinical trials enabling drug discovery in Africa for both Africans and the global population. The new capital will also enable the company to begin its expansion across the African continent.
Dr. Abasi Ene-Obong, CEO, 54gene, commented: “It’s truly incredible to witness the impact of African scientists in global research, and it is critical to global health that this continues. We want to scale our contribution to global drug discovery by extensively developing life science capabilities on the continent, and this additional capital will catalyse our endeavours.”
Dr Ene-Obong continued: “In this round, we have brought in partners that keep us true to our mission of equalising healthcare and who can help us replicate our success throughout Africa. We believe the world will benefit from an African global drug discovery company that leverages the deep insights found in genomics research in diverse populations and ensures true equity for the African population. It’s exciting to see our company shift into the next gear as it targets becoming one of the top global companies in genomics research.”
54gene will also be expanding its genomics and molecular diagnostics division across Africa, ensuring that African patients get access to accurate diagnostics and enabling the application of precision medicine in the clinical setting throughout the continent. To lead this new business unit, the company has brought in Michelle Ephraim as General Manager Diagnostics Pan-Africa. Michelle has held various sales leadership roles across Africa for Leica Biosystems, PerkinElmer, and Merck Millipore.
Yassine Oussaifi, Partner at Cathay AfricInvest, commented: “As a pioneer in genomics and precision medicine in Nigeria, 54gene has built a unique health technology platform leveraging African resources to unlock scientific discoveries for the benefit of African and global communities. At Cathay AfricInvest Innovation, we’re dedicated to backing innovative, inclusive solutions that connect African technology and research with global innovation ecosystems to help them scale. 54gene works across drug discovery, molecular diagnostics and clinical trials, boosting access and affordability of various healthcare solutions that will positively impact worldwide. We look forward to working with the 54gene team on their development on the continent and beyond.”
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