Kuunda, a digital lending company operating across Africa, has completed a $5 million share sale that lets some early investors sell their stakes while bringing in a larger long-term sharehol
Kuunda, a digital lending company operating across Africa, has completed a $5 million share sale that lets some early investors sell their stakes while bringing in a larger long-term shareholder.
E4E Africa, an investment firm, led the transaction, while existing investors Accion Ventures, Portugal Gateway Fund, and Seedstars Africa Ventures also increased their stakes.
Announced on October 13, the transaction is a secondary share sale, meaning existing shareholders sell their shares to other investors. Unlike a traditional funding round, the money goes to the shareholders selling their stakes rather than directly to the company.
The deal gives early investors a way to recover part of their investment without waiting for Kuunda to go public through an initial public offering (IPO) or be acquired.
“This is an important milestone for Kuunda and our investors,” said Andrew Milne, CEO of Kuunda. He added that completing the sale reflects the strength of the business and its lending infrastructure, which serves millions of people across Africa.
Kuunda expands digital lending across AfricaKuunda provides technology that helps mobile money operators, banks, and other financial service providers offer credit to customers, merchants and agents. According to the company, its lending infrastructure has disbursed more than 870 million loans worth over $4.4 billion, reaching 14.6 million agents, merchants and consumers across Africa.
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Its services help individuals and businesses access short-term credit for everyday transactions, particularly those who may struggle to obtain loans through traditional financial institutions. Kuunda currently operates in five markets and plans to expand into seven additional markets.
Bas Hochstenbach, managing partner at E4E Africa
Bas Hochstenbach, managing partner at E4E Africa, said the company uses technology and partnerships with financial institutions to provide credit to underserved consumers and small businesses. He also pointed to Kuunda’s growth and focus on building a sustainable business as reasons for increasing the firm’s investment.
What the transaction means for African startupsThe sale highlights how investors in African startups can recover their investments before a company goes public or is acquired. It also allows existing investors to increase their ownership without requiring the company to issue new shares.
For Kuunda, the transaction brings E4E Africa in as a larger long-term shareholder as the company prepares to expand into new markets. However, the $5 million should not be mistaken for fresh capital raised to fund its operations, as the proceeds go to the shareholders selling their shares.
The company says it remains focused on expanding its lending infrastructure and building profitable financial products for consumers and businesses across Africa.
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