Kenyan fintech Kwara raises $3M seed round, awards up to 4,000 credit unions.

Kwaraa Kenyan fintech digitizing credit union (Saccos), has more than doubled its customer base in the last year, and is looking at more growth in the coming years after raising $ 3 million additional seeds and signed a technology sharing agreement with the Kenya Union of Savings. & Credit Cooperatives (Kuscco), the national umbrella representing Saccos.

Following the Kuscco partnership, Kwara said it has acquired connections to a pool of over 4,000 Saccos for its bank-as-a-service offering. As part of the strategic transaction, Kwara is also set to acquire the subsidiary of Kuscco IRNET, a computer company and company for Saccos, for an undisclosed amount.

According to Kwara, Kuscco’s deal comes at the right time in his plan to double in Kenya.

“We think we have barely managed to score the top of the Kenyan market. And so, we will invest heavily in products and services to deepen our relationship here,” said Kwara co-founder and Chief Executive Officer. Cynthia Wandia told TechCrunch.

“The reason (for the transaction) is clear, first of all it is an opportunity to create leadership and distribute our main products quickly, and to deepen our competitive fleet. We are entering a four exclusive partnership, which means that no other technology company can buy with Kuscco. They are placing their bets on us but we have been able to prove that we can make it as long as possible. then we grow,” said Wandia, who co-founded the fintech and David Hwan (COO) in 2019.

The round of seed expansion was attended by existing investors DOB Equity, Globivest and Willard Ahdritz, the founder of Kobalt Music. The new sponsors One Day Yes, Base Capital, as well as investors, including Mikko Salovaara, the CFO of Revolut, also participated in the round. The new funding brings the amount of seed raised by the startup $7 million. The first round saw the participation of several investors, including Breega, SoftBank Vision Fund Emerge, Finca Ventures, and New General Market Partners.

Kwara, which is also present in South Africa and the Philippines, has grown its business to 120 from 50 at the end of 2021, recording 100% customer retention – a proof of the value it provides to its customers purchase. The automated system, said the startup, has ensured the success and growth of customers.

Kwara’s products improve credit unions’ back-end operations by helping them move away from paper-based processes and physical branches, opening up new opportunities for them to sign up new members and create new products.

The company also has a next-generation neobank app that gives members of credit union partners access to additional services such as quick loans and other features such as insurance. It said that the use of the neobank app, which also allows users to deposit money directly into their Sacco accounts, and track their balances and payments, has grown 35-fold since its launch last year. eat

The fintech is planning on adding more features to accommodate Saccos, and other products for neobank app users as well.

“We continue to sell more or less development brands for larger bags with larger capital letters, which are the same size and height and some banks. There is specific information they need and specific ways they need to maintain it so we will continue to invest in that,” said Wandia, adding that Kwara is also investing in the development of the neo-banking experience. They are set to add more features to help members create “a personal vision of their own goals and start working towards achieving them.” They will also sign other partnerships a other features that add more value to app users.

“We believe that every time a sacco member leaves their bag and gets another service because the bag does not provide a missed opportunity for that person to make a real profit from the return of that product. All the income from those products will flow back to the members as dividends,” he added.

Credit unions are formed by like-minded people or members of a business, such as farmers or teachers, who buy shares in the organization. , save money and make loans. They are popular especially in developing regions because of their low interest loans and easy access to credit compared to traditional banks. In Kenya, only 175 savings saccos are licensed, as many remain unregulated.

Leave a Comment