Kudi FinTech Raises 503.6 Million Shillings in Series A Funding

By Soko Directory Team / April 8, 2019




Kudi, a Nigeria based Financial Technology (FinTech) company focused on digital payments and collections, raised USD 5.0 million (503.6 million shillings) in Series A funding.

The funding round was led by San Francisco based Partech Ventures, an investment firm that finances and supports technology and digital companies.

The funding round was also joined by Michael Seibel, the CEO, and a partner at Y Combinator, an American based seed accelerator. Existing investors Khosla Ventures and Y Combinator also participated in the funding round.

Kudi has raised a total of USD 6.7 million having raised USD 1.7 million in seed capital. Kudi seeks to make financial services accessible and affordable for all Africans, and they achieve this by enabling the underbanked and unbanked Africans access to basic financial services like money transfers, bill payments, and cash withdrawals through an agent network and through mobile phones.

Since its launch in January 2017, Kudi has grown its agent network to over 4,500 merchants and is adding new agents every day. The company makes it easy for agents to sign-up and have more visibility into the company’s day-to-day operations. They process over USD 30.0 million (3.0 billion) in payments each month.

Kudi will use the funding to grow its team, grow its agent network, develop and launch new financial services products such as savings, loans, and insurance and build partnerships with banks and other FinTech companies.

FinTech remains the most attractive sector and was the highest funded sector for investors in 2018 with 4 of the 10 largest deals made in 2018 being from this sector.

The growth in the funding of FinTech companies is expected to improve due to;

  • High Returns – According to data collected by Crunchbase, since 2007, Fintech start-ups have raised an average of USD 41.0 million in Venture Capital and exited for an average value of USD 242.9 mn.
  • Attractive Realization Periods – Private equity firms typically focus on investing for a short lead-time, often between three to five years. Many Fintech companies start showing profits by year three hence giving a chance for investors to realize their gains in time, and,
  • Cheaper Running Costs – They are cheaper to run since a FinTech company is not weighed down by the same burden of costly regulation that governs traditional businesses. This makes PE firms to manage their FinTech portfolio with easy flexibility.

FinTech lending and microfinance institutions, in general, have been a major attraction for investors in Kenya and Sub-Saharan Africa.

Lack of access to finance is a major issue for entrepreneurs and Micro, Small and Medium Enterprises (MSMEs) across Africa. According to the IMF, there are 44.2 million MSMEs in Sub-Saharan Africa with potential demand for USD 404.0 bn in financing.

The current volume of financing in Sub-Saharan Africa is estimated at USD 70.0 billion signifying a huge financing gap of USD 331.0 billion. Microfinance institutions aim to bridge this gap by offering convenient access to credit.



About Soko Directory Team

Soko Directory is a Financial and Markets digital portal that tracks brands, listed firms on the NSE, SMEs and trend setters in the markets eco-system.Find us on Facebook: facebook.com/SokoDirectory and on Twitter: twitter.com/SokoDirectory

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