Kenyan fintech Kwara raises $3 million for a seed extension and agrees to work with over 4,000 credit unions

According to Kwara, its banking-as-a-service offering now has links to a pool of over 4,000 saccos as a result of the Kuscco relationship. Kwara also plans to pay an undisclosed sum to acquire Kuscco’s subsidiary IRNET, a software provider for saccos, as part of the exclusivity agreement.

The Kuscco transaction, according to Kwara, comes just in time for its strategy to intensify its focus on Kenya.

“We believe that we have only begun to scrape the surface of the Kenyan market. Kwara co-founder and CEO Cynthia Wandia said that the company will “simply be really investing in goods and services that enhance our engagement here.”

“The justification (for the transaction) is obvious. In the first place, it presents a chance to increase lead generation, disseminate our core product quickly, and widen our competitive advantage. As a result of our exclusive collaboration, Kuscco won’t be able to sell alongside any other tech firm. They are increasing their bets on us, but as we develop, we have shown that we can succeed,” said Wandia, who co-founded the fintech with David Hwan (COO) in 2019.

Existing investors DOB Equity, Globivest, and Willard Ahdritz, the creator of Kobalt Music, took part in the seed expansion round. Fintech leaders, including Mikko Salovaara, the CFO of Revolut, and new funders One Day Yes and Base Capital also contributed to the round. The latest round takes the startup’s total seed funding raised to $7 million. Breega, SoftBank Vision Fund Emerge, Finca Ventures, and New General Market Partners were among the investors who participated in the initial round.

Kwara, which is present in South Africa and the Philippines, increased the number of its clients from 50 at the end of 2021 to 120 while maintaining a 100% customer retention rate, demonstrating the value it offers to its customers. The business claims that the automated onboarding procedure has guaranteed customer growth and success.

By assisting credit unions in moving away from time-consuming paper-based procedures and physical branches, Kwara’s solution improves their back-office operations, giving them additional opportunities to expand their member base and develop innovative products.

Additionally, the business offers a next-generation neobank app that provides members of affiliated credit unions access to extra services including rapid loans and services from outside providers like insurance. The neobank app’s user base, which also enables users to deposit money directly into their sacco accounts and manage their finances and payments, has reportedly increased 35-fold since its release last year.

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