Kuda Technologies, a fintech company operating in Nigeria and the United Kingdom, has raised close to $100m in funding over the past five years, the Chief Executive Officer, Babs Ogundeyi, announced on Wednesday.
Ogundeyi made the disclosure during a panel session at the
GITEX Africa conference in Morocco, where he discussed the company’s growth and
the challenges of securing investment as an African fintech startup.
The event brought together tech industry executives and
experts to chart a path for Africa’s digital future.
The GITEX Africa 2024 technology fair scheduled for May 29 –
31, kicked off in Marrakech, Morocco capital with more than 1,500 exhibitors
from 130 countries and nearly 700 startups attending.
“We launched in Nigeria in August 2019 and have raised close
to $100m within that period,” Ogundeyi said during the panel session titled
“Beyond the Starting Lane: Navigating Advanced Funding.”
Other panelists included, co-founder of Glovo in Spain;
Sacha Michaud; partner at Africinvest Tunisia; Yassine Oussaifi, and CEO of
Yoco South Africa, Katlego Maphai.
Ogundeyi highlighted the difficulties African startups face
in attracting foreign investment due to investors’ unfamiliarity with the local
environment.
He noted that Kuda Technologies is headquartered in the UK
to facilitate easier access to funding, as most capital comes 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 emphasized that securing funding is a rigorous process,
especially 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,” he expounded.
Funding in Africa’s tech startup ecosystem experienced a
significant decline in 2023, according to Disrupt Africa, a research firm.
Total investment into African digital startups dropped by
27.8 per cent to $2.4bn, with 406 startups raising this amount, down from over
$3bn in 2022
Ogundeyi advised that African startups need to educate
investors about the local context and opportunities to build trust and attract
necessary investment.
Kuda Microfinance Bank, a subsidiary in Nigeria, is owned by
Kuda Technologies. The bank has grown its customer base to 7.5 million users in
Nigeria, making it one of the largest fintech companies in Africa.
“The setup and the vision are across the world. Nigeria is
one of those countries; it’s a big market, and it’s a big country. There is
Kuda UK. We have licenses in Canada and Tanzania; all these are owned by Kuda
Technologies,” Ogundeyi told The PUNCH in an interview.
The co-founder of Glovo in Spain; Sacha Michaud noted that
venture capitalists tend to invest in areas and countries where they feel
comfortable.
Michaud told the panel that when a startup focuses on
Africa, it often faces numerous rejections from investors.
“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.
“So, there’s an educational component to this, making
investors aware of the opportunities and potential in Africa,” he narrated.