Recently, an article published by TechCabal provided some insight into Kuda Bank’s alleged financial performance. The fintech raised $55 million to hit the half a billion ($500 million) valuation mark last year. The article was based on a financial report which flagged some concerns about the bank's performance.
The highlight of the now publicly available results was a 40x growth in 2021’s revenue of ₦3.2 billion, up from ₦72.7 million in 2020.
Disclaimer: Kuda Bank is a private company, and the analysis here is based on the financial numbers published in this article, which the company has not publicly acknowledged.
Key takeaways:
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According to TechCabal, Kuda bank reported a 6x jump in net losses for 2021 to ₦6.1 billion, despite a 40x jump in revenues to ₦3.2 billion.
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Kuda’s model as a startup involves an aggressive focus on growth at the expense of profitability as it tries to capture its target market.
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The same article places Kuda’s NPLs at 69% of its loan book. This reflects Nigeria's persistent challenges with lending. However, as Kuda continues to grow and tweak lending strategies, it could be on the path to profitability.
However, this revenue growth couldn’t cushion the 6x rise in the reported operating expenses of ₦7 billion from ₦0.94 billion in 2020. And so, its expenses, coupled with other costs, contributed to the neobank’s (bank without branches) ₦6.1 billion loss which was 6x higher than the ₦0.87 billion loss posted in 2020.
