Fintech

Kuda, the Nigerian neobank, has grown in leaps and bounds. The neobank almost tripled its revenue in 2022, recording $22 million up from $7.7million in the year before. 

The neobank utilised targeted advertising to get well-paying customers to its doorsteps. In 2022, it recorded 4.9 million users. That number has since grown to become 7 million.

Its digital banking platform allows customers to make payments, access loans, and manage their wealth. It recorded $100 million in deposits in 2022, more than double the $41 million it recorded in 2021. Its business banking services also recorded an uptick, with customer deposits jumping from $102,000 to nearly $15 million. The business claims it offered its businesses payroll management services to over 100,000 businesses in the year in review. 

While the bank launched in 2019 has rapidly gained traction, the journey to profitability for digital banks is often a marathon, not a sprint. Look at Revolut and Starling, the European neobank titans, who only recently turned a profit despite launching years ago. Even Nubank, the Brazilian unicorn, took eight years to become profitable. Of course, Brazil is not Nigeria, but the point stands: building a sustainable neobank is hard.

Although its 2022 losses outpace the previous year, Kuda Bank’s CFO, Frederic Bidet, insists that the company has enough cash—$33 million—to break even.

89% of businesses in the informal economy pay levies and market fees. The informal economy is typically described as untaxed, but is that true? Click here to find out more.

E-commerce:

Jumia CEO Francis Dufay is cutting more costs. In its earnings call yesterday, the CEO said that Jumia will now employ an asset-light model to fulfil deliveries. The company plans to establish new warehouses in Egypt and Ivory Coast which will be rented and not owned.

In its latest financial results, the company reduced its losses to about $20.2 million, compared to $38 million in the previous quarter. It also reported revenue of $36.5 million for the second quarter of the year. JumiaPay, the company’s primary receiver of transactions on its e-commerce platform also brought in positives. Transactions on the platform reached $1.9 million. This growth was driven by increased adoption of JumiaPay for deliveries and the success of cashback promotions introduced in the second quarter.

Jumia maintains a cash reserve of $45.1 million and total liquid assets of $92.8 million, 67% of which are dominated in USD to reduce the company’s vulnerability to currency fluctuations. The e-commerce company also recorded 2 million quarterly active users thanks in part to its search engine optimization (SEO) and customer relationship management (CRM) strategies. 

Despite yesterday’s announcement of cost-cutting measures and improved financial performance, Jumia’s stock price took a significant dive, closing at $4.89 (from $10.59 on Monday). We’d give it some time though. The company’s Q1 earnings call, where it reported a 71% cut in costs, led to a sharp 150% YTD jump in share pricing, a high that peaked at $14.56 in July 2024.

Are you dealing with the complexities of collecting payments from your customers? Fincra’s payment gateway makes it easy to accept payments via cards, bank transfers, virtual accounts and mobile money. What’s more? You get to save money on fees when you use Fincra. Get started now.

Paystack Virtual Terminalhelps businesses accept secure, in-person payments with real-time WhatsApp confirmations and ZERO hardware costs. Enjoy multiple in-person payment channels, easy end-of-day reconciliation, and more. Learn more on the Paystack blog →

You should definitely read these Read Original