Nigerian digital-only bank Kuda, which is based in London and Lagos, has raised $1.6 million while its platform is still in the beta-testing stage.
Kuda is the first digital-only bank in Nigeria to be issued with a micro-finance license from the Nigerian Central Bank, Techcrunch reports.
The fintech startup attracted the funding from investor Haresh Aswani, the Nigeria managing director of Singapore-based consumer goods firm Tolaram Group, according to a company blog post.
Aswani studied business, management, marketing, and related support services at the University of Houston, graduating in 1984.
The funding was raised with participation from a London-based network of industry-focused startup accelerators, Startupbootcamp, U.K.-based investment banker Ragnar Meitern and other unnamed angel investors.
Kuda offers online checking accounts with no monthly fees, a free debit card, and is planning to offer savings and peer-to-peer payment options on its platform in the coming months.
Kuda was founded in 2018 by Babs Ogundeyi and Musty Mustapha.
Ogundeyi previously worked as an auditor at PwC and a special adviser on finance to the Nigerian government. Mustapha was a software engineer at Stanbic Bank and earned a Ph.D. in machine learning and artificial intelligence, according to Pymnts.
Kuda plans to use the new funds to “expand our software development and customer support teams and equip them with the best tools available,” according to a blog post.
The Kuda mobile platform is in the beta-testing stage but users in Nigeria have been able to download and use it since August.
Kuda aims to launch a full version of the platform before the end of the year, according to CNBCAfrica.
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The digital-only bank does not have a single physical branch, with all banking done on its mobile platform.
Kuda is focused on the Nigerian market but has ambitions to expand into other parts of Africa.
“It’s Nigeria for right now, but the plan is to build a pan-African digital-only bank,” Ogundeyi told Techcrunch.
Kuda has agreed on partnerships with Access Bank, GTBank and Zenith Bank, three of Nigeria’s biggest banks, to allow users to deposit money at no charge in more than 10,000 branches and ATMs across Nigeria.
