Nala, an African payments company, has raised $40 million in equity, marking one of the largest Series A deals in Africa.
The funding round was led by San Francisco-based VC firm Acres Capital, with participation from DST Global Partners, Norrsken22, HOF Capital, and other existing investors including Amplo and NYCA partners. Notably, Angel investors such as fintech founders Ryan King of Chime and Vlad Tenev of Robinhood also contributed.
Nala’s founder and CEO Benjamin Fernandes in a chat with TechCrunch, said that the latest funds follow a $10 million seed round in 2022, which will support the company’s ambitious global expansion plans. This includes scaling its remittance services to reach the Asian and Latin American markets.
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Currently, Nala’s consumer app allows users in the E.U, U.K, and U.S. to send money to 249 banks and 26 mobile money services across 11 African markets. This includes regions where the company has integrated with mobile money services, such as Kenya’s M-Pesa, where users can directly pay bills into local mobile wallets.
Fernandes explained that the decision to enhance payment capabilities was driven by user demand for comprehensive control over their finances. The fintech aims to extend these offerings to the new target markets, beginning with Asia.
“This $40 million funding round marks a pivotal moment for Nala, It will enable us to go beyond remittances and extend our reach beyond Africa, building a robust payments ecosystem. We’re reinvesting this money to enhance our infrastructure, ensuring reliable, low-cost payments for all. With the launch of our payment rails and the expansion of our B2B platform Rafiki, we’re not just talking about change, we’re building it. We’ve got some bold, ambitious plans, give us a couple of years,” said Fernandes.
Nala is also focusing on its B2B payments platform, Rafiki, launched in March, to facilitate payments for global businesses operating in and out of Africa.
Founded in 2017, the payment platform aims to increase economic opportunities for Africans at large. In 2023, it acquired payment service provider licenses in several countries, including Tanzania, its home country, where the technology is directly integrated with banks and telcos, partnering with Tanzania’s leading network, Vodacom M-Pesa.
According to a World Bank report, sending money to Africa remains the world’s most expensive continent for remittances, with costs averaging 7.84 percent. In January 2024, Sub-Saharan Africa continues to lead in remittance costs, with fees reaching up to 36% for every $200 sent from abroad.
Nala CEO Fernandes pointed out that there remains a big opportunity to develop payments in Africa, saying that the sector is only ‘1% built. He further noted that with the high remittance fee, Africa Will continue to be limited by the opportunities of trade across the continent.
In a bid to ease remittance to Africa, Nala is positioned to be at the forefront of this change. In 2021, Nala pivoted to offer remittance tapping the growing money transfer market in Africa and the demand for reliable and affordable services. Its remittance offering has seen considerable growth since testing out the product in 2021, and has positioned the company to be among top fintechs transforming money transfers in Africa.
Over the last two years, the Tanzanian fintech, through its consumer fintech app, has enabled users in the diaspora including the EU, U.K., and U.S. to send money to their loved ones across 249 banks and 26 mobile money services in 11 African markets. For markets like Kenya, they have integrated with mobile money service M-Pesa enabling users living in the diaspora to pay local bills directly.
Nala confidently takes up the challenge and vows to reshape Africa’s fast-growing electronic payments.