Nala–a Tanzanian cross-border payments company–has raised $10 million (about Sh23 billion) through a money transfer fundraising round.
Nala chief executive officer Benjamin Fernandes said they raised the funds after pivoting from local to international money transfers.
Speaking to The Citizen yesterday, Fernandes said Nala plans to spend the money to build payments infrastructure across Africa.
He said: “I believe payments across the African continent are one percent built. We need proper technology infrastructure embedded within payments systems across Africa.”
He said they started testing international money transfers in 2021 after some users expressed interest in moving money from the United Kingdom (UK) to East Africa, therefore, ushering Tanzanian fintech into the remittance business.
“We got our license approvals to go live in the United States and Europe which will be going live in a month and a half in at least one other EU country, probably France,” he said.
This comes three years after it secured a seven-figure pre-seed round led by Accel in 2019. It built a mobile money service in East Africa and scaled it to more than 250,000 users.
Further expounding, Fernandes said that the business opportunity for payment is lucrative despite digital lenders vying for less than 20 percent of the international money market dominated by traditional offline players.”
According to him, Africa being the most expensive region to send money to, with 10.6 percent in average transaction fees, digital senders, Nala pitch to customers as a platform with the best rates and lowest prices.
He said other players in the space facilitating transfer from the UK to select African countries include unicorn Chipper Cash, Lemonade Finance, Zazuu, and Sendwave. Their collective bet is that their market will grow over time and eat into traditional incumbents’ share. Whether that will happen remains to be seen.
That company has achieved considerable growth since testing out the product last year.
Mr. Fernandes said the platform allows payments from the UK to Tanzania, Kenya, Uganda, Rwanda, and Ghana. And in the past six months, more than 8,000 customers have moved over eight figures in transaction volume to Africa.
“Our core customer base is the diaspora right now who live in the UK,” he said.
Nala is currently present in Tanzania, Kenya, Uganda, Rwanda, Ghana, and South Africa, and plans to expand its operation in 12 African countries by the end of the year, including Nigeria.
To enable cross-border payments from the UK, the US to Africa is privately beta testing multi-currency accounts that will allow the African diaspora to store local African currencies when abroad. It is also currently piloting Nala for businesses enabling people who run businesses in the diaspora to make payments to Africa.
Original story on The Citizen