Kuda Bank, a Nigerian fintech startup, has announced plans to offer early investors an ideal opportunity to exit their investment via a secondary sale.
Kuda, the Africa-focused challenger bank, said it was important to give its earliest investors an exit opportunity.
Kuda Bank, after raising $25 million in Series A in March 2021, took its total funding stash to $36.6 million. It had earlier raised $10 million in the largest seed round to be raised in Africa and $1.6 million in pre-seed.
SM River, the consortium consisting of Raj Kulasingam, Haresh Aswani, Vishal Agarwal, and Alwin Magimay, that acted as lead investor of Kuda’s $1.6 million pre-seed round, took the opportunity created by the secondary sale to realise a material return on their early investment.
According to the bank, SM River was the largest investor in Kuda’s pre-seed round, and its stake was bought by other investors.
Babs Ogundeyi, chief executive officer of Kuda, said the bank was delighted to repay its early backings with a material return on their investment.
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Ogundeyi said the bank was particularly grateful for the foresight shown by SM River in recognising the potential in Kuda during its earliest days.
“They have been incredible investors and have provided Kuda with so much value beyond money. The bank had leveraged its knowledge, reputation, and networks to scale and grow. In realising their investment in Kuda, SM River will relinquish their seat on the company’s Board,” Ogundeyi said.
On the exit, Raj Kulasingam of SM River Consortium said the consortium saw a huge opportunity inherent in the creation of Nigeria’s first digital bank and backed it to take advantage of the opportunity.
“It’s been an incredible journey of growth and scale, and we commend the Kuda team for getting the company to where it is in such a short space of time. As angel investors, who focus on early-stage investments, it’s now time to recycle our capital, find the next Kuda, and hand over the baton to institutional VCs to guide the founders to further scale and grow. We will continue to watch with pride as Kuda delivers financial innovation to Africa and the world,” Kulasingam said.
Kuda’s exit opportunity is another clear demonstration of the growth of Africa’s fintech sector and shows how fast-growing technology start-ups in Africa are generating positive returns and multiples for early investors and shareholders.
