Kuda’s second attempt at multicurrency banking comes with lessons and $15M backing from investors

Kuda Technologies Limited (“Kuda”), the UK parent of Nigerian neobank, Kuda microfinance bank (“Kuda bank”) has relaunched multicurrency wallets and cross-border payment services for users in eligible jurisdictions.

This relaunch comes three years after a failed first attempt and fresh capital injection of $15 million in July 2024, according to PitchBook¹, bringing its total funds raised to about $110 million.

Kuda, through its multi-entity structure, provides banking and payments services to customers via a mobile and web app. With its app, users can get local account details, receive and hold money, and make payments. The new feature allows eligible users in eligible regions to open GBP and EUR accounts and make local and international payments.

“It is something we are pretty excited about,” Nosakhare Oyegun, Kuda’s Senior Vice President for Business Banking, added. “Remittance is a crowded space, but we are focused on convenience. It is very inconvenient to shuttle through three to four apps to make one transaction.”

A significant aspect of the neobank’s seven million customer base has begun to move abroad, with nobody to serve them, CEO Babs Ogundeyi said at a pre-launch briefing. He described serving this migrating user base as “inevitable” amid a rise in freelancers and digital nomads. The company plans to add USD and CAD wallets, shortly.

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In Canada, Kuda operates via Kuda Technologies Canada Limited.

Kuda’s first attempt at multicurrency and cross-border

When Kuda started thinking about market expansion, it chose the UK as its first market.

In November 2021, it registered Kuda EMI Ltd as the operating entity in the UK, separate from the holdco. The subsidiary would partner with banking providers to deliver services to Kuda’s customers. These providers did not have to be actual banks. They only need to offer bank-like services. This includes issuing accounts (or wallets) that work with the local payment system. Such firms are often called Banking-as-a-Service (BaaS) providers. In the UK, they are licensed as e-money issuers (EMIs) by the Financial Conduct Authority (FCA).

Becoming a self-licensed EMI in the UK is a time-consuming and unpredictable process. This is the reason why many players opt to acquire a company holding that licence versus applying from scratch. Those who choose not to acquire become an EMD Agent or distributor of an existing EMI. The former requires a notification to the FCA while the latter doesn’t but is less flexible for the distributor.

Kuda, like many others such as Nala, partnered with Modulr, a sought-after BaaS provider in Europe (including the UK).

Since 2018, Modulr FS Limited has been authorised as an EMI. Over the years, it has provided services to over 80 companies looking to issue wallets, and cards to their customers. A large partner (agent) base like that came with risks, and complexities as no two fintech programmes are the same. As a result, Modulr’s governance, systems and controls quaked under the weight of their growth and in October 2023, the FCA placed restrictions on Modulr regarding new partner onboardings. As of today, the BaaS company is down to just 24 programmes.

Becoming an EMD Agent of a UK EMI usually comes with non-trivial costs. The underlying EMI will expect a hefty annual fee (can run into hundreds of thousands of dollars) from the agent to maintain the relationship. Paying such fees only makes financial sense when the programme is up and running and the business model is thriving. That didn’t seem to be the case with Kuda’s first roll-out.

By the end of its first financial year, Kuda EMI Ltd had racked up direct costs of £91,484 (~ $113,000) with almost no revenue (£185). Adding in its administrative expenses, the company ended a year with a significant loss of £429,909 ($530,000).

Before the year ended, Kuda registered in Canada in August 2022. Kuda continued operating its UK entity for another year. During that time, its direct costs nearly doubled, reaching £160,673 (about $200,000). However, its core revenue barely grew, totalling just £449 as of December 31, 2023.

Enter Kuda Canada and the MSB registration

“The first time, we did not quite get it right, but now we have figured it out,” Oyegun said at a media parley that Condia attended on Monday, July 2, 2025.

In March 2023, FINTRAC registered Kuda Technologies Canada Limited as a Money Service Business. The MSB, which we’ve discussed previously, allows its holders to issue virtual account, exchange currency, facilitate payments and even engage in crypto activities.

This allows Kuda to do away with its expensive Agency relationships and partner with global BaaS providers to issue GBP and EUR accounts.

Today, July 8, 2025, Kuda finally dissolved Kuda EMI Ltd, as it forges ahead with the new direction.

Multicurrency aside, Kuda is doing okay in Nigeria

In contrast to its loss-making adventure in the UK, Kuda’s Nigerian operations have fared okay. In the first quarter of the year, Kuda generated ₦6 billion (about $4 million) in revenue. This came from processing ₦14.3 trillion ($9.5 billion) in transactions. Of that total, ₦8.5 trillion came from its core retail business, while ₦5.8 trillion came from its growing business banking segment.

Such low take rates (0.04%) is one of the reasons why many Nigerian fintechs are looking to cross-border payment to boost their top and bottom-line.

The company is betting on a comprehensive suite of services for businesses, moving beyond the popular agency banking model. A six-month pilot for Point-of-Sale (POS) terminals has identified restaurants, boutiques, and supermarkets as sweet spots, said Oyegun. The goal is to manage the full business lifecycle, from invoicing to inventory management.

“We are trying to find the gap,” Oyegun said. “When we find it, we will roll it out.”

The neobank has also ramped up its credit offerings, closing the first quarter with ₦17 billion in overdrafts, a 50% increase from the same period in 2024. Ogundeyi noted that the credit product has achieved a net positive margin, built on a conservative lending model that evaluates user behavior.

To fuel its expansion beyond Nigeria, the UK, and Tanzania, Kuda will continue to raise capital.

Ogundeyi acknowledged the trade-off between rapid growth and near-term profitability. “The desire for growth at a global level could void the eventual plan of profitability,” he said. “However, if the bank chooses to stay lean and conservative, profitability will be easier to reach.”

1. Pitchbook on Kuda’s quiet 2024 round of $15 million ↩︎