Nigerian neobank, Kuda, recorded a net loss of $32 million in 2022 according to its latest financial report filed in the UK.
This came despite a 190 percent surge in the company’s revenue for the year to $22 million from $7.7 million it recorded in 2021.
The loss is primarily driven by increased staffing and operational costs.
As first reported by Tech Cabal, the company, which operates primarily in Nigeria, has also seen its user base double to 4.9 million from 2.4 million in the previous year.
The customer growth indicates that Kuda’s focus on product expansion, including international remittances, and aggressive market entry into the UK, Canada, Ghana, Tanzania, and Uganda has paid off.
Despite the loss, the company maintains it has sufficient funds to break even and is not seeking additional financing.
Kuda’s deposit base more than doubled to $100 million in 2022, with business banking deposits skyrocketing 154x to nearly $15 million. This influx of funds has enabled the neobank to diversify its revenue streams beyond transaction fees and loans.
Treasury investments in Nigeria generated $3.5 million in 2022, accounting for a third of interest income. Kuda is aggressively expanding this revenue stream, capitalising on the Central Bank of Nigeria’s (CBN) rising interest rates to curb inflation.
Kuda’s business banking segment has witnessed rapid growth, with the number of business customers reaching 100,000. The introduction of POS terminals and payroll management services through Bento has further solidified its position in the market.
Despite the positive developments, Kuda faces the challenge of balancing growth with profitability. The company’s cash reserves dwindled by nearly 50 percent to $33 million in 2022, and a previous attempt to raise bridge funding was unsuccessful.
Meanwhile, Kuda on Tuesday marked its fifth anniversary by reiterating its commitment to improving Nigeria’s fintech landscape.
Since its launch in 2019, Kuda has claimed it has pioneered several initiatives that address long-standing challenges in the Nigerian banking sector.
Shortly after Kuda began operations in Nigeria, the fintech company introduced free transfers, which reportedly saves each customer up to 15,000 naira annually.
“After the monthly allocation of 25 free transfers runs out, Kuda’s fixed fee of 10 naira per transfer remains the lowest in the country. This move was made in response to the high transfer fees that have long burdened Nigerian bank customers,” the company shared in a statement released on Tuesday.
Reflecting on the fifth-year milestone, Babs Ogundeyi, Group CEO of Kuda Technologies, said, “Over the past five years, we have focused on solving real problems faced by Nigerian bank customers. From reducing transaction costs to making saving easier and improving access to credit, our innovations are designed to make banking more accessible and efficient for everyone.”