Kuda Bank, a leading Nigerian neobank, has raised an undisclosed amount in an equity funding round in 2024. This comes as the digital bank seeks to bolster its financial position following increased operational expenses that contributed to significant losses and a decline in cash reserves.
In 2023, Kuda recorded a revenue of $32 million, alongside an expansion of its user base to 7.2 million customers. However, its financial losses also rose sharply to $40 million. While the bank previously denied raising capital in 2023, its latest financial disclosures confirm that a funding round took place in 2024.
According to a corporate filing with Companies House, UK, the company stated “The Group completed one round of fundraising via equity in 2024, and the directors are confident that should further funding be required, it can be obtained.”
Although Kuda has not disclosed the exact valuation for this round, previous reports indicated that the bank was seeking $20 million at a $500 million valuation. If the funding was secured at this valuation, it would reflect continued investor confidence despite Kuda’s aggressive revenue multiple of 15x—significantly higher than established neobanks such as Nubank (8.4x) and Monzo (5.4x).
Before securing additional capital, Kuda held $96 million in customer deposits, a figure that lags behind Nigeria’s tier-2 commercial banks such as Unity Bank ($1.35 billion) and Wema Bank ($1.9 billion). Moreover, its cash reserves declined to $5.3 million in 2023, a steep drop from $30.8 million in 2022.
To diversify its income streams, Kuda plans to monetize its proprietary banking software through licensing agreements. This strategy mirrors Sterling Bank, which commercialized its SeaBaaS core banking technology, securing a partnership with MTN’s fintech subsidiary, Momo, in 2023.
Like many digital banks, Kuda remains in a high-growth phase that demands substantial capital. However, history suggests that profitability in the neobanking sector takes time—Monzo and Nubank took nearly a decade to achieve profitability.
With its latest funding round, Kuda has extended its financial runway, but the bank must focus on reducing operational costs ($44.8 million) while maintaining sustainable growth to improve its long-term financial health.
