Kwara raises a $4m Seed Round to build the first ever credit union-powered neobank out of Africa.
NAIROBI, Kenya, 4 November 2021 – Nairobi-based fintech startup Kwara today
announced a $4m seed round from investors across Africa, Asia, Europe and the US. The
round follows rapid sales growth and the upcoming launch of their neobank app. They will
use these funds to further develop their app in order to enable credit unions in emerging
markets to digitize and bring financial services to millions of people.
Kwara is building a next generation neobank for emerging markets, powered by existing
credit unions. They provide BaaS software to credit unions to upgrade their back-office
operations, then turn their existing account-holders into users of the startup’s neobank app.
The app allows members of credit unions to deposit money directly to their credit union
accounts, repay their loans and apply for instant loans, while tracking their finances and
payments, all in a seamless and social manner. In addition, Kwara is building open banking
infrastructure via an open API that allows credit unions to integrate with payment gateways,
banks and third party vendors, enabling a full marketplace.
Kwara CEO, Cynthia Wandia, says: “We are building a solution for people – an estimated 1
billion – who do not currently have access to personalized banking services. This is the result
of a gap in banking-grade technology and the lack of neobank-like experiences for the end
clients. We’ve been thrilled to see the excitement around the Kwara brand among credit
unions and their members, which is fast becoming synonymous with a superior user
experience and the future of banking.
Thanks to our investors, we will now be able to offer an end-client experience that is 100 times better than what they previously had access to.” Over 300 million people currently bank at credit unions in emerging markets, and that number is growing at 6% year-on-year. Kwara aims to increase that to at least 1 billion by the end of the decade, positioning itself as the platform for the $500B in transactions between credit unions and their members.
With credit union clients in Kenya, South Africa and the Philippines, the company launched in January 2019 and today is growing their credit union customer base by 40% month-on-month. By trusting Kwara with their banking operations, and enlisting their clients to users of the Kwara app, Kwara’s clients are growing their membership by 19%, and their loan base by 46% annually.
With over 40 full-time employees and growing, Kwara has already attracted top talents from Nubank, FairMoney and Pi Pay in order to perfect their app and offer clients a premium neobank experience. Anyone who does not yet have access to a personalised banking service will be able to join a credit union through Kwara.
Investors in Kwara’s seed round include Breega, SoftBank Vision Fund Emerge, Finca Ventures, New General Market Partners, Globivest, Do Good Invest, Rabacap, Launch Africa, Norrsken Impact Accelerator, Future Africa, Samurai Incubate, DOB Equity and several fintech execs investors including founders of Meltwater, The Flex Company and ComplyAdvantage and executives from Salesforce and PayPal.
“Over the years, we’ve seen an increasing interest in how to build wealth through community, as well as a shift in consumer preferences towards digital-first banking,” said Ben Marrel, Founding Partner at Breega, who led the investment. “Kwara’s unique approach is a catalyst for a new way of retail banking through digital-first credit unions. We are both proud and excited to be helping this outstanding team scale across Africa and other emerging markets”.
Kwara aims to have 1 billion people benefit from credit unions through the Kwara app by the end of the decade.