Money

Accel-backed cell cash platform NALA to start out providing remittance companies to East Africa – TechCrunch

According to a McKinsey reportIn 2017, the total number of mobile money services worldwide was 282, with more than half of the services operating in sub-Saharan Africa.

In 2020 these numbers increased significant, but the ratio remained similar. According to a GSMA report. Of this number, 171 are from Africa and 157 are from sub-Saharan Africa.

In Tanzania, there can be mobile money services relatively Difficult to use due to unstable internet and high service fees. Benjamin Fernandes noticed this as a national TV presenter on building a mobile money service that will enable people in East Africa to pay for TV subscriptions as early as 2011.

Six years later he started his own mobile money and wallet aggregator. NALAto solve these problems. Its first mobile application enabled users to pay mobile money and use mobile banking without an internet connection. The company grew to 250,000 users in over a year after it was officially launched.

Last year the WorldBank forecast a sharp decline of international transfers to Africa. While Africa is still the most expensive region to send money to, with average transaction fees of 10.6%, the opposite is true. Remittance activity on the continent increased.

For example, Kenya had the highest referral rate ever $ 3 billionwhile WorldRemit acquired Sendwave for $ 500 million in August 2020, and Mama Money said it grew 500 percent over the year.

NALA also noticed an increase in transfer requests, with one in seven users trying to get money internationally. This happened even though I was not in this business at the time. It’s not difficult to see why: right now, over 70% of money is sent to sub-Saharan Africa is being processed through physical deals. When many OTC services were suspended or restricted due to coronavirus restrictions, people were left with expensive, unreliable, or difficult to access alternatives.

Combined with the increasing trend towards digital-first financial services and eavesdropping on requests from some users, NALA began testing international money transfers in August 2020 facilitate Payments from the UK to Kenya, Uganda and Tanzania. By building a multi-currency ledger where people can send money from the UK to Tanzania and back to the UK, NALA can create an account, according to Fernandes wise for Africa.

I think international payments are only built up to 1% today. Until you can send money both ways perfect, Our job is not done yet, “Fernandes told TechCrunch. We believe African markets should also be sender markets. There is a lot of trade with other countries and most of the money is sent over expensive Bank transfers or in physical stores. It doesn’t have to be like that; It’s time for something better. ”

Various platforms are trying to achieve this, but none specifically target the East African region. According to the CEO, this is NALA’s game. “We see a great advantage for us here. We’re on the ground, we understand mobile money, we’ve built bill payments on top of our previous product, and this is an extension of that, ”he added.

Benjamin Fernandes (CEO, Nala)

Since graduating from Y Combinator as the first East African company in 2019 NALA has brought other interesting investors on board to support its mission. Most notable is Accel, which has was held under lock and key for some time. The VC firm rarely does business on the continent and has only invested in NALA and Egypt’s Instabug. Other supporters are NYCA partner and angel investors like Shamir Karkal (co-founder of Simple), Peeyush Ranjan (former CTO of Flipkart and current head of Google Payments) and Thomas Stafford (DST Global).

NALA has also used the services of Nicolas appreciates, He was Vice President of Engineering at Osper and worked at Monzo to become the company’s CTO, which Fernandes said will greatly improve the company’s chances of achieving its goal. “When we added someone of his caliber to our team, it only opened the doors to what we could achieve as he created multiple currency books for various large companies.”

Currently, however, the company will be rolling out a beta product next month for UK-based customers sending money to Kenya and Uganda (Tanzania will come later).. The company claims the service will support instant payments to all major mobile money accounts and is entering into a number of banking partnerships to make this possible facilitate Money transfers from East Africa to the UK.