VCs have scaled back their investments in tech firms – Kuda Bank MD

• VCs have scaled back their investments in tech firms
• The tech ecosystem is still full of opportunities
• Kuda Bank’s plans for the future

According to Babs Ogundeyi, co-founder and managing director of Kuda Bank, venture capital (VC) investments in Nigerian technology startups have slowed recently compared to levels seen before the pandemic.

The slowdown, according to Ogundeyi, was brought on by the global economic downturn. He claims that a number of issues with the global economy have inevitably reduced the amount of funding that African digital firms have been able to raise in comparison to prior years.

He continued by stating that the need for strategic change has been demonstrated by the global economic slump, which is why many companies have already started using cost-cutting measures.

The tech ecosystem is still full of opportunities

The Kuda Bank MD continued by highlighting the fact that prospects in the technology sector still exist in developing countries like Nigeria despite recent events. He continued by saying that there are numerous investment prospects in the Nigerian economy in the financial services industry.

“The Financial sector is highly regulated, one of the oldest, highly competitive, yet with a lot of opportunities. Despite these challenges, we were able to come in and succeed by making financial transactions simple, and leveraging technology.

“Over the last 2 years, there have been more FinTechs in the country, because the opportunity is becoming more and more glaring. Some firms are doing payments, others lending, deposits, switching, infrastructure, amongst others,” he said.

READ MORE: Top 10 FinTech Companies In Nigeria (2022)

The demand for innovation

Babs also emphasized the need for participants in the financial technology sector to continuously develop and prosper, acting as facilitators as opposed to rivals. He pointed out that the financial services industry is quite diverse and needs a team of individuals working in specialized fields in order to support the nation’s efforts to promote financial inclusion.

“Kuda Bank has benefitted from the investments in the Nigerian tech space. When we started in 2019, there weren’t as many foreign investors compared to today. We have been part of the growth and the belief in Nigeria. Our growth has fuelled other technology companies as well, which shows the potential of leveraging technology. A lot of entrepreneurs are coming into this space,” he added.

His opinion on the direction of the Nigerian finTech sector

Babs predicted that some of Nigeria’s largest businesses in the not-too-distant future will be digital/tech firms. This is due to the fact that he thinks more Nigerians would adopt technology as a way of life in the future. He said,

“Nigeria has grown significantly in a very short time in terms of human capacity, tech, expertise, training, etc. However, the next 10 years will be very pivotal. I believe there is going to be a lot more adoption as technology is growing astronomically.”

“Nigeria’s population size could double in the next 25 years. Digital transactions have grown significantly. With the increased demand for technology in the country and better internet service, the services will become cheaper.”

Kuda Bank’s plans for the future

According to him, the organization is preparing to expand to additional African nations including Ghana and Uganda. The United Kingdom is another target for the business. Says Babs

“When we started, there were not a lot of people in the sector. So, we had the first-mover’s advantage, coupled with our customer-centric services has seen the brand grow over the years. In the space of 3 years, we have grown our customer base to over 4.6 million customers.

“We are currently looking to expand our services to other countries of the world. Firstly, we are considering Ghana and Uganda as our next markets in Africa, while we are also making the UK our first western launch. Our focus is to be a financial institution for Africans.”

Source: Nairametrics