Kwara has today raised $3 million seed extension and completed the acquisition of IRNET, a software arm of the Kenyan Union Of Savings and Credit Cooperatives (Kuscco), thirteen months after it raised $4 million in seed funding led by Breega and Softbank.
The total seed investment now stands at $7 million. Investors in the round include existing backers DOB Equity, Globivest and the founder of Kobalt Music. New investors, mainly African VCs, participated as well. They include One Day Yes and Base Capital as well as fintech executives including Mikko Salovaara, CFO of Revolut.
According to Kwara CEO, Cynthia Wandia: “We have spent the last three years uplifting the credit union sector in Kenya, becoming the leading core banking provider in Kenya. Our clients grow up to 4 times faster than other credit unions and serve members up to 100 times more efficiently. This acquisition enables us to place a digital banking experience in the hands of every credit union in Kenya, together with the most established credit union partner in Kenya.”
The Kwara platform, in use by 120 credit unions, saw neobank user base grow by 35x, a 120x jump in monthly app transactions, surpassed over 120 Billion Kenya Shillings in cumulative transactions processed on their core banking platform.
The firm says over 25 Billion Kenya Shillings has been securely and rapidly disbursed in fair loans using its platform, leading some of Kwara’s credit union clients to triple their membership base and win awards.
Apart from the acquisition, Kwara has entered into an exclusive digital solutions partnership agreement with Kuscco whereby Kwara will offer its Banking-as-a-service solution and neobanking experience to Kuscco’s 4000+ credit unions to consolidate credit union banking as the preferred retail banking method in Kenya.
Recently, Kwara partnered with Lami, an insuretech to help build the domestic insurance ecosystem and empower SACCO members to get insurance products seamlessly that meet their needs. The initiative is one of the first to broaden access to help close the insurance gap amongst SACCO members, allowing more Kenyans to build financial security.
The startup has continued to ship compelling features to attract larger, more capitalized credit unions while continuing to offer banking grade service that a small or midsize credit union can afford. Fortuitous timing, as the incoming government of Kenya has committed 250 Billion Kenya Shillings over the next 5 years to be disbursed as low-interest loans to the public through financial intermediaries such as credit unions.
“This development marks a game changer in the management of credit unions going forward” says George Ototo, Group Managing Director of Kuscco. “The acquisition of IRNET and the KUSCCO-Kwara partnership will deliver to our 4,000+ member credit unions tested and proven, secure and efficient digital services as well as a modern neobanking experience.”
The entire IRNET team will join forces with Kwara to ensure a seamless transition and to embed the entire Kuscco regional network of 16 branch oﬃces and several hundred marketers and marketing expertise into Kwara.
Kwara’s mission is to bring financial health to all, and strongly believes that credit unions or savings cooperatives are the fastest way to get there. Their vision is to make a credit union account the primary account for 30 million people by 2025, and by 2032 to make credit union banking the standard for 1 billion people in 15 emerging markets.