Fintech

African Fintech Kuda Raises $100M Despite Investment Challenges

Published

2 months ago

May 30, 2024

Kuda Technologies, a leading fintech company with operations in Nigeria and the United Kingdom, has successfully raised nearly $100 million in funding over the past five years.

This significant milestone was revealed by the company’s Chief Executive Officer, Babs Ogundeyi, during a panel session at the GITEX Africa conference in Morocco.

The GITEX Africa 2024 technology fair, which runs from May 29 to 31 in Marrakech, brings together over 1,500 exhibitors from 130 countries and nearly 700 startups.

During the event, Ogundeyi highlighted Kuda’s growth journey and the difficulties African fintech startups face in attracting foreign investment.

“We launched in Nigeria in August 2019 and have raised close to $100 million within that period,” Ogundeyi announced during the panel session titled “Beyond the Starting Lane: Navigating Advanced Funding.”

The session also featured prominent figures such as Sacha Michaud, co-founder of Glovo in Spain; Yassine Oussaifi, partner at Africinvest Tunisia; and Katlego Maphai, CEO of Yoco South Africa.

The discussion centered on the challenges and strategies for securing advanced funding for startups.

Ogundeyi emphasized that African startups often struggle to secure foreign investment due to investors’ unfamiliarity with the local market environment.

To mitigate this, Kuda Technologies established its headquarters in the UK, facilitating easier access to funding from Western investors.

“We are headquartered in the UK, but we are Africa-focused, and there is a reason why we are headquartered in the UK. It’s very much related to access to funding. The capital comes primarily from the west. It’s easier to attract capital in those jurisdictions,” Ogundeyi explained.

He stressed that securing funding is a rigorous process, particularly in Africa, where trust levels are low.

“When we raised our seed funding, the majority of investors had not been to Africa before, making it difficult to connect with something they didn’t understand. It goes beyond investors seeing the numbers or potential; if you don’t have a feel for the environment or understand the psyche of the people, it becomes very difficult to connect resources to that region,” Ogundeyi elaborated.

Despite the challenges, Kuda Technologies has made significant strides. Its subsidiary, Kuda Microfinance Bank in Nigeria, has grown its customer base to 7.5 million users, making it one of the largest fintech companies in Africa.

The company’s expansion strategy includes obtaining licenses in Canada and Tanzania, reflecting its vision of global reach.

Ogundeyi’s insights were echoed by Sacha Michaud, who noted that venture capitalists tend to invest in regions where they feel comfortable.

“We launched in Africa six years ago and were in high funding mode. In every funding round, we had to convince our investors why we were focusing on the region when we could invest our resources in higher-return areas like Europe,” Michaud shared.

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Samed Olukoya

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Fintech

Flutterwave Celebrates Inclusion in CNBC’s Top 250 Global Fintechs

Published

1 week ago

July 18, 2024

Samed Olukoya

Flutterwave has been recognized as one of the Top 250 Fintech companies globally by CNBC and Statista.

Joining the ranks of industry giants like Ali Pay, Klarna, Piggyvest, and Mastercard, this accolade underscores Flutterwave’s impact on the financial technology sector.

This honor follows Flutterwave’s recent inclusion in Fast Company’s Most Innovative Companies list, highlighting the company’s pivotal role in transforming Africa’s payment landscape.

The recognition is a testament to Flutterwave’s dedication to innovation and excellence in providing seamless payment solutions across the continent.

Expressing gratitude, Flutterwave acknowledged its talented team, supportive board, reliable partners, and loyal customers for contributing to this success.

The company continues to drive progress in the fintech industry, reinforcing its commitment to enhancing financial accessibility and inclusion in Africa and beyond.

Flutterwave’s recognition on these prestigious lists marks a proud moment and a significant milestone in its journey, reflecting the company’s growing influence and leadership in the global fintech arena.

Fintech

Nigeria Sees 31% Increase in POS Fraud Amid Rising Terminal Adoption

Published

2 weeks ago

July 12, 2024

Samed Olukoya

The prevalence of fraud and forgery in Nigeria’s payment system has shown a significant shift in the first quarter of 2024, with Point-of-Sale (POS) transactions experiencing the highest increase in fraudulent activities.

According to the “Fraud and Forgeries Report in Nigerian Banks” for Q1 2024 by the Financial Institutions Training Centre (FITC), POS fraud cases surged by 31.12%.

In Q4 2023, there were 2,683 reported cases of fraud associated with POS terminals. However, this number escalated to 3,518 cases by Q1 2024.

POS fraud cases made up 30.67% of the total fraud cases (11,472) recorded in the quarter under review.

Financial Impact of POS Fraud

While there was a rise in fraud cases, the amount of money involved in POS fraud declined. In Q4 2023, the total amount involved in POS fraud was NGN604.91 million.

This amount decreased by 37.74% to NGN376.59 million by Q1 2024.

Also, the amount of money lost to POS fraud saw a significant decline, falling from NGN14.62 million by 68.34% to NGN4.63 million on a quarterly basis.

The decrease in financial losses may indicate improved detection and prevention measures, but the overall rise in fraud cases highlights the need for continued vigilance.

Adoption of POS Terminals

The rise in POS fraud cases is attributed to the widespread adoption of these terminals by merchants and consumers alike.

As a cash-driven Nigerian economy, the convenience and efficiency of POS transactions have made them a popular choice.

However, this widespread adoption has also made them a target for fraudsters seeking to exploit vulnerabilities in the system.

In Q1 2023, the number of registered POS terminals increased by 218,475, from 2,318,947 in January 2023 to 2,537,422 by March 2023.

By the same quarter in 2024, the number of registered POS terminals had increased by 289,154, from 3,441,287 in January 2024 to 3,730,441 by March 2024.

Overall, between the end of Q1 2023 and Q1 2024, Nigeria witnessed an additional 1,193,019 POS terminals, marking a 47.02% increase.

Despite this increase in the number of registered POS terminals, the first quarter of 2024 saw POS transaction volumes reach 314 million, which is a significant drop of 73.81 million, or 19.03%, from the 387.81 million transactions recorded in the first quarter of 2023.

Regulatory Measures and Industry Response

The Corporate Affairs Commission (CAC) recently stated that POS agents of major fintechs in Nigeria, including OPay, Palmpay, and Moniepoint, among others, must have registered their businesses by July 7, 2024.

However, it extended the deadline by 60 days, giving operators until September 5, 2024. The CAC said the registration is aimed at safeguarding the businesses of fintechs and customers, as well as strengthening the economy.

Meanwhile, the Association of Mobile Money and Bank Agents in Nigeria (AMMBAN) condemned the mandated registration, describing it as an attempt to tax more Nigerians to generate revenue for the government.

Fintech

PalmPay Issues July 7 Deadline for POS Operators to Submit CAC Certificates

Published

3 weeks ago

July 5, 2024

Samed Olukoya

PalmPay has announced a firm deadline of July 7, 2024, for all Point of Sale (POS) operators using its platform to register with the Corporate Affairs Commission (CAC) or submit their CAC certificates.

This mandate aims to ensure compliance with Section 863 (1) of the Companies and Allied Matters Act 2020 and the 2013 Central Bank of Nigeria (CBN) guidelines on Agent Banking.

In a statement released on Thursday, PalmPay emphasized the importance of adhering to these legal requirements.

“Following CAC’s directive for POS operators to register and submit their CAC details on or before July 7, 2024, PalmPay is encouraging its business users who have not yet complied with the directive to do so promptly,” the statement read.

This initiative comes in the wake of a two-month registration deadline issued by the Federal Government through the CAC, mandating POS companies to register their agents, merchants, and individuals.

The directive is part of broader efforts to bring regulatory compliance and transparency to Nigeria’s burgeoning fintech sector.

To facilitate the registration process, PalmPay has integrated the CAC registration portal into its Business App.

This integration allows operators to seamlessly register their businesses and submit the required documents, ensuring a smoother compliance process.

Umuteme Enakeno, Head of Marketing and Communication at PalmPay, reiterated the company’s support for the CAC directive.

“PalmPay fully supports the CAC’s directive. We provide 24/7 customer support and conduct weekly meetings to guide operators through the process,” Enakeno stated.

He also highlighted that operators can seek assistance through PalmPay’s customer support channels, including phone, email, or in-person visits to any of the 36 state offices across Nigeria.

PalmPay has urged all its business customers to submit or register their CAC details before the deadline.

“Register your business via the PalmPay Business App: Ensure that all necessary documents and information are provided accurately before submitting your application. Update your PalmPay account once you get the certificate to reflect your new corporate status,” Enakeno advised.

Failure to comply with the CAC registration requirement will result in the freezing of PalmPay accounts, the company warned.

This stringent measure underscores PalmPay’s commitment to aligning with national regulatory standards and fostering a compliant fintech ecosystem.

Meanwhile, the Association of Mobile Money and Bank Agents in Nigeria, representing POS operators, has indicated plans to challenge the mandatory CAC registration in court, questioning its legality and potential impact on their operations.