NALA, a Tanzanian cross-border payments company has raised $10 million in a seed funding round. The round was led by Amplo, Accel $ Bessemer Partners, and DFS Lab. There was also participation from angel investors like the Head of Google Payments, Peeyush Ranjan, and Co-founder and CTO of Monzo, Jonas Templestein, etc.
This round is coming after the startup raised an undisclosed amount of pre-seed funding.
Founded by Benjamin Fernandes, a former national television host of youth talk shows and sports shows in Tanzania, NALA is a fintech startup enabling cross-border payments from the U.K. (and the U.S. and the E.U.) to Africa.
Money sent by people living outside their countries of origin accounts for the largest foreign exchange inflow for many nations, indicating the huge importance remittances have assumed as a factor of economic development. The cost of remittances in sub-Saharan Africa was the highest, averaging 8.17 per cent in the fourth quarter of 2020.
In Tanzania, mobile money services can be relatively difficult to use due to unstable internet and high service fees. Also, sending money requires a user to enter somewhere between 39-46 digits but NALA has greatly simplified this process. International money transfers started on the platform in 2020 and the users of NALA have since gone from 100,000 in 2019 to more than 250,000 users.
The first East African company from Y Combinator in 2019, most of NALA’s users are in diaspora. And in the last six months, more than 8,000 customers have moved over $10 million in transaction volume to Africa.
“Our core customer base is the diaspora right now who live in the U.K. This is the customer we’re currently serving today as we speak,”Benjamin Fernandes, CEO
Expansion, increased product offerings and talent acquisition
The investment will allow NALA to hire more talent and foster growth efforts in the U.K., U.S. and Europe. In this regard, the startup has acquired license approvals. It will also build payment rails in Africa and expand to new countries. NALA is currently present in Tanzania, Kenya, Uganda, Rwanda, Ghana and South Africa. The plan for the startup is to be present in 12 African countries by the end of the year, including Nigeria.
The fintech company is also planning to officially launch multi-currency accounts that will allow the African diaspora to store local African currencies when abroad. This is a process that is still in beta testing. It is also currently piloting NALA for Businesses enabling people who run businesses in the diaspora to make payments to Africa.
Users of NALA will also be able to send money from Africa to the U.S. and the U.K. All these plans are in a bid to differentiate itself as not just a remittance company.
“We don’t want to be compared to a regular remittance company, and people will do that naturally. But we think remittance is just the starting point for what we’re going to build. My take is that payments across the continent is 1% built, and there’s a lot of infrastructure and software that needs to be built deeply. That’s where we want to sit and this $10 million round is going to do a lot of that.”Benjamin Fernandes, CEO NALA
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