Nala, a Tanzanian remittance service serving the African diaspora, has raised $40 million Series A equity round to serve the Asian and Latin America markets by expanding NALA’s consumer business beyond Africa and build Rafiki, its B2B payments platform designed to lay the payment rails for the next billion users.
The round, which follows a $10 million seed round in 2022, was led by San Francisco-based VC firm Acrew Capital, with participation from DST Global, Norrsken22, HOF Capital, and existing investors including Amplo and NYCA Partners with angel investors Ryan King of Chime and Vlad Tenev of Robinhood.
According to Nala founder and CEO Benjamin Fernandes , “This funding is a testament to the hard work of our team and the trust our investors have in our vision. It marks a new chapter in our journey to revolutionize payments for the next billion. While raising $40 million is a remarkable achievement, it is just one milestone in our long-term vision. We’ve made great progress, but the work is far from done. Our ambitions are bold — we aim to 100x this business, and the path to achieving that is paved with hard work, innovation, and relentless dedication.”
Launched by Benjamin Fernandes in 2017, NALA powers quick remittances from the UK, US and the EU to send money to their loved ones across 249 banks and 26 mobile money services in 11 African markets through its consumer fintech app .For markets like Kenya, they have integrated with mobile money service M-Pesa enabling users living in the diaspora to pay local bills directly. However, building the service on the payment rails of other providers meant that the fintech could not guarantee dependability.
In 2023, NALA injected $6m into the African ecosystem and hosted its first Demo Day live event in its Kenyan office. It also acquired Payment Service Provider licenses in several countries, including Tanzania and Rwanda. It also directly integrated with banks and telcos to enhance NALA by building more elements of the value chain internally.
After Nala started getting requests from businesses who wanted to ‘use NALA’s rails’ for payments, Nala began working on Rafiki to help them build on top of its infrastructure to bridge the gap and enable seamless payments for companies around the world directly into African mobile money and bank accounts.
The company has now developed its own platform that directly integrates with banks and mobile money providers. Dubbed Rafiki, the B2B payment platform is intended to stem payout incidences, minimize user charges and ensure reliability.
“We built the Rafiki infrastructure, not by choice, but by the nature of the market. When we started, we were experiencing 15% failure rates from partners as we started to scale, and this affected our cost of operations massively. The only way to solve this problem was at the source, to get licenses and build payment and treasury infrastructure reliably,” said Fernandes.
Nala and Rafiki operate independently and have signed a few large contracts with global payments and remittance companies. The platform which is currently accessible to a select few, powers Nala’s consumer fintech app, the cross-border payments platform also targets global businesses making payments into and out of Africa. The global remittance and payroll companies integrating with Rafiki will allow direct deposits into their recipients’ mobile money wallets or bank accounts.
“Africa is currently home to 1.3 billion individuals, and according to the New York Times, by 2050, this number is expected to double to over 2.5 billion, making it the world’s largest population and workforce. This immense potential inspired us to take on the challenge of building a reliable and efficient payment system for this rapidly growing continent,” he said. “The next billion doesn’t just include Africa but a majority of the worlds emerging markets NALA is looking to serve.”
With over 500,000 customers, Nala’s mission is to build payments for the next billion. Nala also plans to venture into payments processing for businesses as part of its quest to solve a reliability “problem at scale for global businesses that want to trade with Africa.”