Nigerian digital bank Kuda is expanding to the UK with a remittance product targeted at Nigerians in the diaspora. Although Kuda is based in London, the startup operates in Nigeria.
Since launching in 2019, Kuda has seen massive success. The company claims that it currently has up to 5 million users. Although it announced plans to expand into other African countries last year, specifically Ghana and Uganda, it is yet to do so. The company describes its expansion into the UK as the onset of a global expansion drive.
Founded by Babs Ogundeyi and Musty Mustapha, Kuda provides Africans (more like Nigerians) with financial services both within and outside Africa. These services are facilitated via its subsidiary, Kuda MFB Limited. Its other subsidiary, Kuda EMI Limited houses newly launched services, one of which is the new remittance product targeted at Nigerians in the UK.
Currently, Nigeria is sub-Sahara’s biggest inbound remittance market. It is also one of the top 10 globally and is so big that it makes up about 4 percent of Nigeria’s GDP as of 2020. And although it is a big market, sending money to Nigeria from places like the US and the UK remains costly.
Speaking on why Kuda made the move into the remittance space, Babs Ogundeyi, the startup’s CEO said that “I don’t necessarily think it’s crowded because obviously, there are still a lot of challenges in remitting money to Africa, especially to Nigeria, which is still expensive. But for us, it’s not just a remittance play. There’s a user experience, convenience, and price factor involved too.”
He also added that Kuda will be taking on a different approach that will involve not charging fees. He said that Kuda is entering the UK by setting a flat fee of £3 with a transfer limit of £10,000. The startup expects most of the transactions that will take place on its platform to fall between £350 to £500, the CEO said.
Kuda also intends to provide direct debits and local transfers to Nigerians in the UK in addition. Kuda will be relying on a third party, unlike its remittance product which might have been built in-house, to provide these services. Kuda will be relying on Modulr, an embedded payments platform for digital businesses to offer a mobile wallet, virtual and physical cards, local U.K. transfers, and direct debits.
“Ultimately, Kuda is building a one-stop shop for Africans, including other services outside remittance. And our plan is not just for Africa, but for Africans everywhere. The U.K. is the first of the ‘outside of Africa’ destinations. We plan to be in other African countries and expand the remittance services to customers there and the diaspora market,” CEO Babs Ogundeyi said on the expansion.