Tanzanian cross-border payments company, NALA, which just recently pivoted from local to international money transfers, announced it has secured $10 million in a new fundraising round.
Since testing out the product last year, NALA has achieved considerable growth. The platform allows payment transactions from the U.K. to Kenya, Tanzania, Uganda, Ghana and Rwanda.
The company note that in the last six months, over 8,000 customers have moved more than $10 million in transaction volume to Africa.
CEO, Benjamin Fernandes, said: “The diaspora who live in the U.K right now is our core customer base and they are the ones we are currently serving today as we speak.”
“We have also acquired the license approvals to go live in at least on other country in the E.U. and the U.S. and France remains our top pick for now”, he added.
The chief executive also mentioned that NALA is currently present in Kenya, Tanzania, Uganda, Ghana, Rwanda and South Africa and plans to go live in Nigeria and 11 more African countries by the end of the year.
According to Fernandes, remittance is NALA’s low-hanging fruit as the company has more offerings in its pipeline when compared to Revolut when it first launched in the U.K.
Revolut is a European fintech unicorn and financial super app of some sorts which started out as a multi-currency bank accounts provider, peer-to-peer payments, fee-free currency exchange, and a feature for businesses.
In addition to allowing cross-border payments from the U.K, U.S and the E.U to Africa, NALA is privately beta testing multi-currency type accounts that will enable the African diaspora store local currencies when abroad.
It is also currently trying out NALA for Businesses which will enable business people in the diaspora to make payments to Africa.
Fernandes said his team at NALA are scaling up to be in the U.S and U.K and not just be in a consumer-facing product in Tanzania, Kenya and Uganda.
He added that in the long run, they plan to build infrastructure across the continent where they allow people outside the continent send money back.
“We’ve submitted our remittance license application in Uganda, as well as Kenya, for in order for us to be able to do this the other way around,” he said.
The company has hired ex-Citi U.K. MLRO and former group chief compliance officer at Guaranty Trust Bank, Subuola Abraham, to lead its compliance efforts.
It also reached agreements with Citi Bank Global to fast-track growth across multiple regions by managing their FX. It is one of the few African tech companies with this deal.
Other players enabling transfer from the U.K. to select African countries include unicorn Chipper Cash, Zazuu, Lemonade Finance and Sendwave.
They have a collective bet that over time, their market will grow and eat into traditional incumbents’ share. We’ll see whether that happens or not.
This seed round is coming three years after NALA raised a seven-figure pre-seed round led by Accel in 2019.
Over the years, NALA built and scaled its mobile money service in East Africa to over 250,000 users.
In 2020, after some users expressed interest in sending funds from the U.K to African countries, NALA began testing international money transfers to East African countries like Kenya, Tanzania and Uganda, thus introducing the Tanzanian fintech into the remittance business.
The business opportunity for remittance is widely dominated by traditional offline players with digital vendors vying for less than 20% of the market, it still remains a very lucrative sector across the globe.
Africa is the most expensive region to send money to, having at least 10.6% in average transaction fees, digital senders like NALA present their services to customers as platforms with the lowest prices and best rates.
We expect NALA to utilize this recent seed funding to scale into more African countries s they have stated as the scaling opportunities in Western Africa are limitless.
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