Kuda, the Target Global-backed neobank focused on Nigeria, reported a 190% revenue increase in 2022, reaching $22 million, up from $7.7 million in 2021. According to its latest audited financial statements filed in the U.K., where the company is headquartered, this growth was driven by a surge in customer adoption, with users doubling from 2.4 million to 4.9 million during the year.
Operating primarily in Nigeria through its subsidiary, Kuda MFB, which holds a microfinance banking license, Kuda has expanded its offerings to include international remittances and business banking services. The neobank is also entering new markets, including the U.K., Canada, Ghana, Tanzania, and Uganda, as part of its global growth strategy.
Kuda’s deposits more than doubled in 2022, rising from $41 million in 2021 to $100 million. Business banking services saw exceptional growth, with deposits jumping 154 times to nearly $15 million, fueled by offerings like POS terminals and payroll management services. Overall, Kuda’s total assets rose by 30% to $154 million, with nearly 80% tied to its Nigerian operations.
The startup has also diversified its revenue streams. Treasury investments in Nigeria contributed $3.5 million in 2022, representing a third of its interest income. This strategic focus on treasury investments was driven by rising interest rates as the Central Bank of Nigeria (CBN) sought to curb inflation. Kuda allocated $42 million to new treasury investments during the year and plans to adapt further to fiscal policy changes.
Despite robust revenue and user growth, Kuda’s net losses also grew significantly, doubling to $32 million in 2022 due to increased staffing and operating expenses. Since its launch in 2019, Kuda has accumulated $55 million in losses. Heavy spending on marketing, including a World Cup campaign, contributed to the financial strain, though the company has since reduced advertising expenses to cut its burn rate.
Kuda, which was last valued at $500 million, has raised $74 million in funding but saw its cash reserves decline by nearly 50% to $33 million at the start of 2023. Efforts to raise an additional $20 million in bridge funding at a flat valuation in mid-2023 were abandoned.
However, CFO Frederic Bidet expressed confidence in the company’s financial outlook, stating that Kuda has significantly narrowed the gap between revenue and losses and has sufficient funds to reach breakeven without additional fundraising. “We are making good progress towards breakeven and do not need to fundraise to meet our operating expenses at the moment,” Bidet said.
