NALA, a Tanzanian cross-border payments company that recently pivoted from local to international money transfers. The seed round is coming almost three years after NALA secured a seven-figure pre-seed round led by Accel in 2019. In that time, NALA built a mobile money service in East Africa and scaled it to more than 250,000 users. But in 2021, NALA started testing international money transfers after some users expressed interest in moving money from the U.K. to East African countries (Kenya, Uganda, and Tanzania), thus ushering the Tanzanian fintech into the remittance business. The business opportunity for remittance is lucrative despite digital lenders vying for less than 20% of the international money market dominated by traditional offline players. With Africa being the most expensive region to send money to, with 10.6% in average transaction fees, digital senders like NALA pitch themselves to customers as platforms with the best rates and lowest prices. Other players in the space facilitating transfer from the U.K. 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’ll happen remains to be seen.
NALA has achieved considerable growth since testing out the product last year. The platform allows payments from the U.K. 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. Remittance is NALA’s low-hanging fruit. According to Fernandes, NALA has more offerings in its pipeline that can be likened to Revolut’s when it first launched in the U.K. The European fintech unicorn, now a financial super app of some sorts, started off providing multi-currency bank accounts, fee-free currency exchange, peer-to-peer payments, and a feature for businesses. Similarly, NALA, in addition to enabling cross-border payments from the U.K. (and the U.S. and the E.U.) 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. Away from Revolut’s playbook, Fernandes says the Tanzanian fintech will be building out infrastructure to enable money transfers from Africa to the U.S. and the U.K. The investment will allow NALA to hire more talent and foster growth efforts in the U.K., U.S., and Europe, build payment rails in Africa and expand to new countries.