Kuda Bank, a Nigerian fintech company that provides banking services through its mobile app, has acquired two payment licenses in Tanzania and Canada as it expands its footprint across Africa and the global market.
With these licenses, Kuda will be able to offer remittance and multi-currency wallet services to Africans residing in Canada, as well as similar services to its customers in Tanzania through the Tanzanian Payment Service Provider (PSSP) license.
These new licenses will see Kuda compete with the likes of African payment companies such as LemFi and Nala, that have positioned themselves as global neobanks catering to Africans in the diaspora.
Kuda’s acquisition of a payment license in Tanzania is coming after it raised $55 million in series B funding, which it noted would be used to double down not just on new services for Nigeria, but to launch into more countries on the African continent. In the words of co-founder and CEO Babs Ogundeyi, he said the company plans to build a new take on banking services for “every African on the planet.”
Also, as regards Kuda’s global expansion, the fintech company has previously ventured into the remittance market by securing a payment license in the United Kingdom in 2022. It introduced a subscription-based remittance service with a flat fee of £3 and a transfer limit of £10,000. However, sources suggest that this product has been discontinued, possibly due to the market’s lack of readiness for a subscription-based remittance offering.
Given this experience, it is probable that when Kuda launches its services in Canada and Tanzania, it will opt for a different approach rather than subscription-based models. By focusing on markets like Canada and the UK where the number of Nigerian migrants continues to grow, Kuda has an opportunity to grow its foreign exchange revenue at a time when the FX rates are negatively affecting the profits of startups in Nigeria.
Notably, Kuda has continued to grow significantly since launch, as of January this year, co-founder and CEO Babs Ogundeyi told users that the Nigerian online challenger bank had reached almost $56 trillion (~$60 billion) in transaction value since its 2019 launch.
As the fintech sector continues to gain momentum across Africa, Kuda has been at the forefront of revolutionizing traditional banking services and making them accessible to the unbanked and underbanked populations.
Currently, Kuda’s primary revenues are generated through fees and commissions charged when its customers make airtime purchases, bill payments, and investment income from fixed deposits. The company concluded 2022 with nearly $20 million in annualized revenues, recording $100 million in monthly deposits.
