Tanzanian fintech NALA raises $10M to build Revolut for Africa – TechCrunch

Startups

NALA, a Tanzanian cross-border payment company that recently switched from local to international money transfers, said Thursday it has raised $10 million in a new fundraising round.

The seed round comes nearly three years after NALA secured a seven-figure pre-seed round in 2019 led by Accel. During that time, NALA built a mobile money service in East Africa and scaled it up to more than 250,000 users. But in 2020, NALA started testing international remittances after some users expressed an interest in moving money from the UK to East African countries (Kenya, Uganda and Tanzania), leading the Tanzanian fintech into the remittance business.

The remittance business opportunity is lucrative, despite digital lenders competing for less than 20% of the international money market dominated by traditional offline players.

Since Africa is the most expensive region to send money to, with 10.6% average transaction costs, digital channels like NALA present themselves to customers as platforms with the best rates and lowest prices.

OOther players in the space facilitating the transfer from the UK to certain African countries include Unicorn Chipper Cash, Lemonade Finance, Zazuu and Sendwave. Their collective bet is that their market will grow over time and eat the share of traditional incumbents. Whether that will happen remains to be seen being seen.

That said, NALA has seen significant growth since the product was tested last year. The platform enables payments from the UK to Tanzania, Kenya, Uganda, Rwanda and Ghana. And in the past six months, more than 8,000 customers have moved more than $10 million in transaction volume to Africa, the company said.

“Our main customer base is the diaspora who now live in the UK This is the customer we are serving right now”, founder and CEO Benjamin Fernandes told TechCrunch in an interview. “We have also received our license approvals to go live in the US and EU, which will go live in at least one other EU country in a month and a half, probably France.”

The chief executive also said NALA, which is currently present in Tanzania, Kenya, Uganda, Rwanda, Ghana and South Africa, plans to be live in 12 African countries, including Nigeria, by the end of the year.

Remittance is NALA’s low-hanging fruit. According to Fernandes, NALA has more offers in the pipeline that can: be compared to Revolut’s when it first launched in the UK. The European fintech unicorn, now something of a financial super app, started offering multi-currency bank accounts, free currency exchange, peer-to-peer payments and a feature for businesses.

Likewise, NALA, in addition: to enable cross-border payments from the UK (and the US and the EU) to Africa is private beta testing of multi-currency accounts that allow the African diaspora to store local African currencies abroad. It is also currently piloting NALA for businesses, which will allow people who run businesses in the diaspora to make payments to Africa.

Aside from Revolut’s playbook, Fernandes says Tanzanian fintech will build infrastructure to enable money transfers from Africa to US and UK

“We’re scaling that up, aren’t we only in Tanzania and Kenya and Uganda are as a consumer-oriented product. But in the long run, we want to build infrastructure across the continent where we can go from the continent and send people money back. We submitted our money transfer license application in Kenya, as well as in Uganda, so we can do this the other way around,” said the founder..

The company has hired Subuola Abraham, ex-Citi UK MLRO and former group chief compliance officer at the pan-African bank Guaranty Trust Bank. to lead compliance efforts. It also struck a deal with Citi Bank Global to manage their FX and rapid growth around the world multiple regions, one of the few African tech companies with this deal.

Image Credits: NALA

As part of its efforts to acquire and retain users, NALA is launching a crowdfunding campaign this year that will give the first users access to shares in the company, Fernandes said. It is a step that comparable companies that facilitate money transfer in Africa, such as Eversend, have made in recent years.

NALA’s executive team includes: Nicolas Esteves (CTO) and Nicolai Eddie (COO), who have experience at Monzo, Osper and Morningstar.

This new funding round includes lead investor Amplo, Accel and Bessemer Partners, including local investors such as DFS Lab.

NALA also received funding from an impressive group of angel investors: Jonas Templestein, co-founder and CTO of Monzo; Vladimir Tenev, co-founder and CEO of Robinhood; Co-founder Alex Bouaziz; Laura Spiekerman, co-founder of Alloy; Peeyush Ranjan, the head of Google Payments and early collaborators at Revolut and TransferWise.

Sheel Tyle, the founder and general partner of Amplo, will join the board of NALA, the company said in a statement..

The investment will enable NALA to hire more talent and drive growth efforts in the UK, US and Europe, build payment rails in Africa and expand into new countries.

“We do not want to be compared to a regular wire transfer company, and people will naturally. But we think transfer is only the starting point for what we are going to do to buildFernandes says. “My view is that payments across the continent are built at 1% and a lot of infrastructure and software is needed” to be build deep. That’s where we want to be and this $10 million round will do that a lot. ”

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