- Kwara has raised a $3 million seed extension to help credit unions switch from paper-based processes to digital.
- The seed extension will also help it grow significantly throughout the year.
- The startup has made a deal with the Kenya Union of Savings & Credit Cooperatives (KUSCCO) to generate leads.
Kwara’s new seed extension brings the startup’s total seed raise to $7 million. In December 2021, it raised $4 million to build a neobank that will give members of savings and credit co-operative societies (SACCOs) access to instant loans and third-party services such as insurance.
Its seed extension of $3 million had the participation of existing investors such as DOB Equity, Globivest, and Willard Ahdritz, the Founder of Kobalt Music. Investors in the previous seed round include Breega, SoftBank Vision Fund Emerge, and Finca Ventures.
Kwara’s solution is to help SACCOs upgrade from the old-fashioned physical branch and paper-based operations to more digital processes with its banking-as-a-service offering.
The startup has also signed a deal with the Kenya Union of Savings & Credit Cooperatives (KUSCO), allowing it to engage with a pool of about 4,000 SACCOs. The startup is also set to acquire KUSCO’s subsidiary IRNET, a software company and provider for SACCOs, as part of the deal.
Co-founder and CEO of the company, Cynthia Wandia, told TechCrunch that “the rationale (of the deal) is clear; first, it is an opportunity to generate leads and distribute our core product as fast, and to deepen our competitive moat. We’re entering an exclusive partnership, which also means no other tech company will be able to market with KUSCO. They are stacking their bets on us, but we have been able to prove that we can do it as we continue to grow.”
She also said, “we think we’ve barely scratched the surface in the Kenyan market. And so, we are just going to be really investing in products and services that deepen our relationship here.”
The startup is also present in South Africa and the Philippines, growing its clientele base in these regions by 140% and retaining 100% of its customers.