Valar Ventures, a US-based venture capital fund, has led a $25m Series A funding round into Nigerian digital banking startup Kuda, with Target Global and other unnamed investors participating.

Launched in 2016 as lending platform Kudimoney, Kuda rebranded in June of 2019 and received a banking licence from the Central Bank of Nigeria (CBN) to launch a full-service mobile-only bank.

The capital injection from Valar Ventures is the fund's first foray into Africa.

It comes just four months after Kuda raised $10m in a seed financing round.

The company will use the funding to drive growth in Nigeria, adding new product features for lending, and expand to other markets in Africa.

Since launching in September 2019, Kuda has grown to provide consumer and business banking services to over 600,000 customers in Nigeria and processed over $2bn in transactions during February 2021, up from $5.2m in February 2020.

Babs Ogundeyi, CEO and co-founder of Kuda, said: “We could not be more pleased that Valar Ventures has decided to come on board and join us on this mission. Their insights and experience in helping advise some of the world’s most successful challenger banks will without doubt be a critical part of our successes going forward.”