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Kwara Raises a $3 million Seed Extension
Kwara, a Kenyan fintech digitizing credit unions (Saccos), has raised a $3 million seed extension and signing an exclusive digital solutions distribution agreement with the Kenya Union of Savings & Credit Cooperatives (Kuscco), the national umbrella body representing Saccos.
The company more than doubled its client base last year, and it’s eyeing enormous growth in the coming years. Through the new partnership, Kwara has agreed to fully acquire software company IRNET Coop Kenya Ltd, a subsidiary of the Kenya Union of Savings and Credit Cooperatives (KUSCCO LTD).
This acquisition marks a step forward for Kwara, as it expands its global footprint and takes a major step toward becoming a leading provider of digital solutions to SACCOs in Kenya.
As part of this acquisition, Kwara has also entered into an exclusive digital solutions partnership agreement with KUSCCO LTD.
Following the Kuscco partnership, Kwara said it has gained connections to a pool of over 4,000 Saccos for its banking-as-a-service offering.
Kwara says the Kuscco deal comes at the right time in its plan to double down on Kenya.
The seed extension round had the participation of existing investors DOB Equity, Globivest, and Willard Ahdritz, the founder of Kobalt Music. New backers One Day Yes, Base Capital, as well as fintech executives, including Mikko Salovaara, the CFO of Revolut, also joined the round.
The new funding brings the total seed amount raised by the startup to $7 million. The initial round saw the participation of several investors, including Breega, SoftBank Vision Fund Emerge, Finca Ventures, and New General Market Partners.
Kwara, which also has a presence in South Africa and the Philippines, has grown its clientele base to 120 from 50 at the end of 2021, maintaining 100% customer retention — proof of the value it delivers to its clients.
The automated onboarding process, the startup says, has ensured customer success and growth.
Kwara’s product upgrades the back-office operations of credit unions helping them to shift away from tedious paper-based processes and physical branches, opening up new avenues for them to sign up new members and create novel products.
The company also has a next-generation neobank app that gives members of partner credit unions access to additional services such as instant loans and third-party services such as insurance.
Also Read: The NINJA Accelerator 2021 // Kwara Selected in 1st Cohort
Kwara who started their operation at Nairobi Garage, said the user base of the neobank app, which also allows users to deposit money directly into their Sacco accounts, and track their finances and payments, has grown 35-fold since its launch last year.
The fintech is planning on adding more features to cater to the Saccos, and additional products for the neobank app users too.
Credit unions are formed by people with a common interest or members of an industry, like farmers or teachers, who buy shares in the institution, save money and take loans.
They are popular especially in developing regions due to their low-interest-rate loans and ease of accessing credit when compared to conventional banks. In Kenya, only 175 deposit-taking SACCOs are licensed, as a vast majority remain unregulated.
Kwara has also started forging alliances with companies, to offer third-party services on its app.
The startup recently partnered with Lami Technologies, a Kenyan-based digital insurance company, to make accessible a wide range of insurance products including health, property, business, and life covers on the app.
In 2019, Kwara was also among the 15 finalists out of the 45 that applied for this year’s 2019 Global Fintech Hackcelerator organized by the Central Bank of Kenya, in partnership with the Monetary Authority of Singapore.
The hackcelerator, which is part of the Afro Asia Fintech Festival commitments in partnership with KMPG, also saw Bureau Vente of Uganda named as a winner.
These saw the two start-ups participate at the Demo Day at the Singapore Fintech Festival, the world’s largest FinTech event and a global platform for the FinTech community, drawing close to 45,000 participants comprising FinTech players, technopreneurs, policymakers, financial industry leaders, investors including private equity players and venture capitalists, and academics.
