Nigeria challenger bank Kuda has raised $10 million in a seed funding round led by Target Global.
The round, tipped as the largest of its kind in Africa, saw participation from SBI Investment and Entrée Capital.
Founded in 2017, Kuda bank calls itself “the bank of the free”. The bank offers a no-fee virtual account and accompanying debit card.
The bank also promises spending analytics, and an ability to qualify for “quick loans” in the near future.
Kuda allows customers to save automatically and claims a 15% yearly interest. It makes its money from broker fees when a user tops up their phone or pays their bills through the app.
Kuda is insured by the Nigerian Deposit Insurance Corporation and licensed by the Central Bank of Nigeria.
It uses a core banking system dubbed “Nerve”, which the bank built in-house an deployed in August 2020.
CEO, Babs Ogundeyi, told TechCrunch that Nerve means it doesn’t need to piggybank on another bank’s systems or services.
Kuda is in the process of receiving a full banking licence so that it can pursue an ambitious lending plan.
Ogundeyi says the bank uses a machine learning algorithm to tailor its services to each customer, and that this combines with its plans for credit.
“The plan for our credit service is that we will base how much we issue and at what terms based on your existing spending habits.”