Nigerian fintech startup Kuda has raised $1.6 million in pre-seed funding, according to media reports.  The startup is based in Lagos and London. 

Kuda recently launched the beta version of its online mobile finance platform. It was granted a banking licence by the Central Bank of Nigeria — differentiating it from other fintech startups. 

The proceeds from the pre-seed funding might be used for it to transition  from beta to live launch in Nigeria by the last quarter of 2019. 

Kuda Founder Babs Ogundeyi told TechCrunch “Kuda is the first digital-only bank in Nigeria with a standalone license. We are not a mobile wallet or simply a mobile app piggybacking on an existing bank. We have built our own full-stack banking software from scratch. We can also take deposits and connect directly to the switch.” 

Currently, Kuda as part of its banking services offers no-monthly fees on checking accounts and a free debit card. It also has plans to offer consumer savings and P2P payments options on its platform in the next few months. 

Media also reported that Kuda is venturing into a relatively strong revenue driven market in Nigeria. Nigeria is slow in adopting digital payments, compared to other African countries such as Kenya, observed the McKinsey Company and Gates Foundation analysis.

The analysis also shows that Nigeria could reach digital payments revenue up to $1.3 billion if it achieves the level of penetration as Kenya. 

In July, MTN Nigeria was granted a payments licence by the central bank to offer financial services in the country. Its Yello Digital Financial Services unit will offer seamless money transfers and other financial services. 

GSMA study found that Nigeria, Ethiopia and Egypt are Africa’s mobile money sleeping giants’ — and they could add more than 110 million new mobile money accounts over the next five years.