Kenyan fintech startup Kwara secures $4m seed round to build neobank for credit unions.


Kwara, a Kenyan startup that is assisting traditional savings cooperatives in becoming modern digital banks, has raised US$4 million in seed funding to further build its neobank app ahead of its upcoming launch.

The seed round was led by  Breega VC firm, with participation of SoftBank Vision Fund Emerge, Finca Ventures, New General Market Partners, Globivest and Do Good Invest. Other investors include Rabacap, Launch Africa, Norrsken Impact Accelerator, Future Africa, Samurai Incubate, DOB Equity and fintech angels.

The funding follows the company’s strong sales growth and comes ahead of the launch of its neobank app. The funding will be used to further build the startup’s software, which will allow credit unions in emerging economies to digitize and offer financial services to millions of people

Kwara is a digital banking platform founded in 2018 by Cynthia Wandia and David Hwan to help unbanked and underbanked individuals form wealth together in a frictionless way. It has a management platform for cooperative staff to drive efficiency and automation, as well as a neobank-style mobile banking app for end-clients, as well as other channels.

Meanwhile, Kwara uses an open API to connect the savings cooperatives with banks, payment gateways, and other third parties. All of this is included in a single software-as-a-service package, which means cooperative clients only pay for what they use and receive a single end-to-end solution. The multi-accelerated startup already has over 60,000 members and processes up to $40 million in monthly transactions. Kwara is increasing its credit union user base by 40% month over month, including clients in Kenya, South Africa, and the Philippines..

“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. 

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

Ben Marrel, founding partner at Breega, said there was increasing interest in how to build wealth through community, as well as a shift in consumer preferences towards digital-first banking.

“Kwara’s unique approach is a catalyst for a new way of retail banking through digital-first credit unions. We are both proud and excited to be helping this outstanding team scale across Africa and other emerging markets,” he said.