Kenya’s Kwara raises $4m in a seed round to launch a credit union-powered neobank.

Kwara, a Kenyan startup that is assisting in the transformation of traditional savings cooperatives into modern digital banks, has raised a US$4 million seed funding round to advance the development of its neobank app ahead of its upcoming release.

Kwara, founded in 2018 by Cynthia Wandia and David Hwan, is a digital banking platform that enables unbanked and underbanked individuals to build wealth together in a frictionless manner. It provides a management platform to drive efficiency and automation at the cooperative staff level, as well as a neobank-style mobile banking app and alternative channels for end-clients.

Meanwhile, Kwara uses an open API to connect the savings cooperatives with banks, payment gateways, and other third parties. All of this is delivered as a software-as-a-service package, which means cooperative clients pay for their usage and receive a unified end-to-end solution. The multi-accelerated startup already has over 60,000 members and processes up to $40 million in monthly transactions on its platform. Kwara Credit Union has credit union clients in Kenya, South Africa, and the Philippines, and its credit union customer base is growing by 40% month on month.

Kwara has now announced a $4 million seed round from investors in Africa, Asia, Europe, and the United States (US). It is led by Breega and includes SoftBank Vision Fund Emerge, Finca Ventures, New General Market Partners, Globivest, Do Good Invest, Rabacap, Launch Africa, Norrsken Impact Accelerator, Future Africa, Samurai Incubator, and DOB Equity, as well as several fintech executives, including Meltwater, The Flex Company, and ComplyAdvantage founders, and executives from Salesforce and PayPal.

The round follows rapid sales growth and comes ahead of the company’s upcoming neobank app launch. The funds will be used to further develop the startup’s app, which will allow credit unions in emerging markets to digitize and provide financial services to millions of people.

“We are building a solution for people – an estimated one billion – who do not currently have access to personalised banking services. This is the result of a gap in banking-grade technology and the lack of neobank-like experiences for the end clients. We’ve been thrilled to see the excitement around the Kwara brand among credit unions and their members, which is fast becoming synonymous with a superior user experience and the future of banking,” said Kwara CEO Cynthia Wandia.

“Because of our investors, we will now be able to provide an end-client experience that is 100 times better than what they had previously.”

According to Ben Marrel, founding partner of Breega, there is growing interest in how to build wealth through community, as well as a shift in consumer preferences toward digital-first banking.

“Kwara’s distinct approach is a driving force behind a new way of retail banking through digital-first credit unions.” “We are both proud and excited to be assisting this exceptional team in expanding across Africa and other emerging markets,” he said.