Like most money transfers, Nala’s primary revenue model is transaction-based.
Disclaimer: This analysis is based on publicly available information and industry trends and should not be considered complete or definitive. It does not represent Nala’s proprietary strategies or offer financial advice. However, by examining their services and offerings, we can infer the frameworks they might use.
Nala’s vision for the African future is ambitious, and its impact is undeniable as seen in their footprints so far, particularly for Africans in the diaspora.
But what has their journey been like and what revenue streams are supposedly keeping them afloat since launch in 2018?
This article will throw light on just that. Keep reading!
Read Also: All you need to know before you use Nala Money app
Company Profile
Before we get into Nala’s journey so far, here’s a snapshot of their core information:
| Name | Nala |
| Website | https\://www.nala.com/ |
| Founding date | 2018 |
| Founder(s) | Benjamin Fernandes |
| Key people | Nicolas Esteves (CTO), and Nicolai Eddy (COO) |
| Employees | Over 100+ |
| Headquarters | London, Nairobi, and Dakar |
| Industry | Finance Services |
| Business Type | Cross-border Transfers, B2B Payments, Personal Finance |
| Key Services | International money transfers, Mobile money transfers, Business payments, Bill payments, and Goods purchases. |
| Revenue (FY 2024) | TBD |
| Competitors | Afriex, SendSprint, LemFi, TransferGo |
| Contact email | mamanala@nala.com |
What has changed since 2018?
In 2018, NALA launched as a personal finance app, helping users manage their money in Tanzania and Uganda. With over 250,000 users in just these two countries, it built a strong foundation among a community that understood and embraced the vision behind mobile money.
This success laid the groundwork for something bigger. Leveraging the trust and connections formed through its finance app, NALA set out to tackle a more significant challenge: cross-border payments. The initial idea was simple—an “offline Venmo for Africa”—but the team had bigger ambitions in mind.
When the COVID-19 pandemic hit in 2020, remittances to Africa surged. NALA’s CEO, Benjamin Fernandes, saw an opportunity to address the growing demand for affordable and reliable money transfers. This meant a bold pivot from domestic payments to international remittances.
Making such a big change wasn’t easy. Investors were skeptical, employees left, and the team faced internal friction. But Benjamin and his team pushed forward, determined to redefine how remittances worked for Africans at home and abroad.
By 2023, the decision to pivot had started to pay off. NALA had secured crucial licenses to operate in new sender and receiver markets. It also expanded its services to West Africa, including Nigeria, Côte D’Ivoire, and Senegal.
But NALA didn’t just stop at reaching more people. It introduced innovative features, like rate comparisons and instant money transfers using NALA tags, to make life easier for its users. Alongside this, the company invested $6 million in Africa’s tech ecosystem, hosted its first Demo Day in Kenya, and continued to focus on community-driven growth.
In July 2024, NALA raised $40 million in Series A funding, bringing its total funding to over $50 million. This funding allowed the company to build new payment systems across Africa’s 54 countries to make sending money feel as seamless as transferring it within a single country.
How does NALA make money?
The Tanzanian fintech has gained attention for its fairer fee structure, which makes you wonder how it manages to generate enough revenue to sustain its services. Serving a diverse range of customers from diaspora communities, businesses, mobile money users, and everyday consumers, NALA’s revenue model must strike a balance between accessibility and sustainability.
So, to understand its revenue approach better, let’s break down a potential framework the business could be utilizing:
1. The “Freemium” model:
Nala attracts users by offering free peer-to-peer transfers within certain limits. This makes it incredibly appealing for individuals sending money to friends and family.
While there are no upfront transfer fees (or minimal ones for bank transfers), Nala makes money through the exchange rate. They add a markup to the mid-market rate, essentially embedding a fee within the conversion itself.
2. Partnerships and Commissions:
Nala partners with other mobile money companies and while the details are not explicitly stated, they likely earn commissions or referral fees through these partnerships.
This partnership model could extend to other financial services, such as insurance, loans, or investment products, opening up further revenue streams in the future.
3. Business-focused services:
They also offer dedicated services for businesses operating in or with Africa. These services likely come with transaction fees or subscription models, generating a significant revenue stream.
Nala’s Rafiki API (Application Programming Interface) allows businesses to integrate Nala’s payment solutions into their own platforms, which is another lucrative revenue source, similar to Chipper Cash’s API strategy.
4. Value-added services:
Nala allows users to pay bills and purchase goods directly through the app. This potentially generates revenue through transaction fees or partnerships with utility companies and merchants.
By enabling direct transfers to mobile wallets, Nala taps into opportunities for partnerships with mobile money providers.
Additionally, Nala has a limited edition merch store that offers exclusive branded items, which generates additional income and strengthens brand loyalty and community engagement.
To make an estimate:
While specific figures are not publicly available, we can estimate potential revenue based on transaction volumes and fee structures:
- Exchange Rate Markup: If Nala processes $1 million in transfers daily with an average markup of 1.5%, that translates to $15,000 in revenue per day.
- Business Transfers: Assuming a 1% fee on business transactions, processing $500,000 daily would generate $5,000 in revenue.
- Bill Payments and Goods Purchases: Even small fees on these transactions can accumulate significantly with high volume.
What’s next?
With a team spanning 17 countries and plans for a new office in West Africa, NALA continues to grow while staying true to its roots. Also, by offering affordable and reliable payment solutions, individuals and businesses across Africa are empowered.
