Kwara, a Kenyan SACCOtech company, has raised a $3 million seed extension. This comes as good news to the company that more than doubled its client base last year, and also signed an exclusive digital solutions distribution agreement with the Kenya Union of Savings & Credit Cooperatives (KUSCCO).
Following the KUSCCO partnership, Kwara said that it has gained connections to a pool of over 4,000 saccos for its banking-as-a-service offering. As part of the exclusive deal, Kwara is also set to acquire Kuscco’s subsidiary IRNET, a software company and provider for saccos, for an undisclosed amount.
Kwara says the Kuscco deal comes at the right time in its plan to double down on Kenya.
“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,” Kwara co-founder and CEO, Cynthia Wandia said as quoted by TechCrunch.
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. Initial round saw participation of several investors including Breega, SoftBank Vision Fund Emerge, Finca Ventures, 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 a 100% customer retention — a 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. It 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 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.