Africa is one of the biggest breeding grounds of startups, especially fintech which is a major category. This is because a large number of the African population remain unbanked or at most underbanked, creating a need gap that startups have begun to fill. These startups are helping to narrow the financial gap in the continent. While we have a number of already established fintech in the continent, there are a handful of others that are just coming up, some not so different from already existing startups and others with new innovations and problem-solving offerings.
On Thursday, NALA, a Tanzanian cross-border payments fintech announced that it has raised $10 million in a seed funding round, super impressive if you ask anyone. The round follows almost three years after the startup closed a seed round led by Accel.
NALA’s seed round was led by Amplo and saw participation from Accel and Bessemer Partners and DFS Lab. The round was also participated by angel investors namely Jonas Templestein, co-founder and CTO of Monzo; Vladimir Tenev, Robinhood co-founder and CEO; Deel founder Alex Bouaziz; Laura Spiekerman, co-founder of Alloy; Peeyush Ranjan, the head of Google Payments and early employees at Revolut and TransferWise. As part of the deal, Sheel Tyle of lead investor Amplo will be joining NALA’s board.
NALA started in 2019 with a mobile money service that powered local transfers in East Africa. The startup brought its client base to more than 250,000 users. In 2020, NALA started testing cross-border transfers after people started indicating that they’d like to move/ receive money from the UK to East African countries, specifically Tanzania, Uganda and Kenya. The desire to satisfy this “craving” of users launched the startup into the remittances space.
NALA thrives by offering lower rates and prices, as sending money to Africa can be expensive with an average of 10.6 percent transaction fees. Currently NALA’s platform powers payments from the UK to Tanzania, Uganda, Rwanda and Ghana. The company mentioned that in the last six months, over 8,000 users have moved more than $10 million in transaction volume to the continent.
According to founder and CEO Benjamin Fernandes “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. We also got our license approvals to go live in the U.S. and the E.U., which will be going live in a month and a half in at least one other E.U. country, probably France”. He also added that the startup is making moves to be present in 12 African countries before the end of 2022. NALA is currently present in Tanzania, Kenya, Uganda, Rwanda, Ghana and South Africa.
NALA’s CEO compared the platform to Revolut, a European super app providing a series of financial services. The platform is already testing multi-currency accounts that’ll enable Africans abroad be able to hold local currencies. It is also working on enabling foreign businesses to be able to make payments to Africa. It will also be building infrastructure to allow money transfers from Africa to the UK and US.
“We’re scaling that up, not just being in Tanzania and Kenya and Uganda as a consumer-facing product. But in the long run, we want to build infrastructure across the continent where we can do outbound from the continent and allow people to send money back. We’ve submitted our remittance license application in Kenya, as well as Uganda, for us to be able to do this the other way around”, NALA’s CEO said.
The company plans to hire more talents with the fund and grow its efforts across the UK, US, Europe and Africa. The startup also said that it will be launching a crowdfunding campaign this year that’ll give its first users the chance to own shares in the company.