1% Built: Our journey with NALA

An 8 year journey from first check with countless calls in between

We’re celebrating with NALA — one of our first ever portfolio companies— as they announce their $40m Series A (one of Africa’s largest ever Series A rounds) to build out a modern, accessible, and reliable remittance and payments infrastructure for the fastest-growing continent on earth.

Today, they’re featured on a billboard in Times Square and have grown to a team of over 100. But our story starts 8 years ago, in 2016 before NALA was even a company.

Seattle

Can you send me your credit card number, just in case mine fails?

In 2016, DFS Lab had been setup in Seattle. Jake Kendall, my co-founder, was fresh off of a 7 year stint at the Gates Foundation where he led its fintech research and innovation team. I had just finished my MBA at Berkeley and had taken up an offer to join DFS Lab alongside Jake and Ben Lyon who had previously founded KopoKopo.

We were planning DFS Lab’s first in-person bootcamp in Tanzania where we would work with a handful of African founders and go through an intensive week of prototyping and product design. It was a logistical nightmare — passports, visas, flights, hotel bookings, etc. But we were excited.

We met Benji when he was in the middle of his MBA at Stanford and was interning at the Gates Foundation. I remember him joining us at our Seattle co-working space and presenting what he wanted to build at our bootcamp: a USSD-payments network that would be an offline version of Venmo for Africa.

Yes, we were all very optimistic and naive then.

Benji almost missed the event itself. He had MBA obligations still and a near-missed connection on his flight. At some point, I had to WhatsApp him my credit card number. But he made the trip and in Benji’s hometown of Dar es Salaam, NALA was born.

Dar es Salaam

I’m running super low on cash to make payroll

After our bootcamp, NALA joined an excellent inaugural DFS Lab cohort of companies that included Pula (Series B), Pezesha (Series A+), and Appruve (Acquired by SmileID) among others.

The team then went to work. In two months, they were within the top 5 finance app downloads in Tanzania.

But it wasn’t easy. They had to maintain uptime on USSD through third-parties and were competing in a locally regulated, competitive space with banks and mobile operators. At some point, Benji earned the “not sure if I’m going to make payroll” badge of honor (we helped out).

They passed $1m in TPV and eventually amassed 250,000+ registered users.

San Francisco

We have to decide […] if we want to do YC or not

NALA was part of YC’s W19 batch. It also meant they needed to gear up for a fundraising whirlwind. This was fintech in 2019 and it was a frenzy. We ended up joining that round alongside Accel, NYCA, Aspect and several other great funds. We committed first as the third-largest check.

London

I’m working on it (screenshot of a £12 transaction)

I’ve come to learn that one of the critical traits of founders who make it far is if they’re able to ask the hard questions early. NALA had hundreds of thousands of users, millions in the bank, and a YC badge, but the team knew that the business model was simply not going to sort itself out.

A fundamental hard limit in African tech is your customer base’s spending power to support your ambitions. Sometime in 2020, Benji floated the idea about NALA pivoting from an African domestic payments company to a global international remittance company (with a focus on African corridors). There were clear downsides:

• It was a saturated market with giants like Western Union and Wise.
• It required writing new chapter of the NALA story at a time when they should be gearing up for their seed round.
• It would require a huge hiring push and talent that was likely going to be more international and global.

But the upside was straightforward — a customer base with the spending ability to drive revenues underpinned by the macrotrend of a massively growing African diaspora. One day, my phone buzzes with a screenshot of a £12 transaction from the UK. NALA was working on its next chapter.

Like all world-class product teams, NALA shipped. Their transaction volume was still nascent, but their growth, retention, and product feedback were excellent. I helped interview Nicolas Esteves — previously at Monzo — who came on as CTO.

Now it was up to Benji to raise some capital for this new effort.

People know Benji is excellent at fundraising but very few know just how many hoops African founders have to jump through to raise significant amounts of capital. During NALA’s seed raise, I got a voice note one day that a lead term sheet had come in — respectable pricing, storied Tier 1 firm. We started to strategize around closing the rest of the round and I started to ready our own follow-on capital. What came next was 4 months of due diligence. At some point, the diligence asks came down to college transcripts and there was no end in sight.

NALA moved on and later in the year, closed $10 million led by Amplo. We followed-on.

New York

guess what? we were 100% profitable last month

By late 2023, fintech had cooled and businesses like NALA were competing against endless AI deals. But NALA’s remittance business was a rocket ship. Every month, Benji sent me a text asking me to guess revenues and every month I’m guessing too low. NALA had more than 10x’d its revenues and 34x’d its transaction volume from a year ago, closed on key veteran hires, and were acquiring licenses in major markets.

I was running around Silicon Valley and New York meeting with VCs who were inquiring about NALA’s Series A. And here’s where I think Benji really separates himself from the field.

He had tapped into a highly lucrative revenue line with international remittances. Unstable domestic currency in Africa meant that the foreign exchange business was (and still is) booming and it would have been easy to limit the company to harvesting those margins for the next handful of years. But instead, he started messaging me about the domestic B2B payments market and how it aligned with the mission. When Benji talks about “payments in Africa being 1% built,” he truly believes it.

NALA’s Rafiki is a response to Africa’s lack of reliability across B2B payments. It’s a response to the insight that speed and reliability are often more important to customers than even price (within reason). It’s also the answer to another hard question being asked early: what’s actually defensible in African cross-border payments?

We think it’s reliable, in-house infrastructure. It must be built deliberately with uptime and compliance in mind. It must be seamlessly integrated into NALA’s remittance business to power treasury and foreign exchange. It means building yet another playbook for African payments, but it means truly moving the needle.

Today, NALA raised another $40 million led by Acrew to answer that hard question and beyond. This is a story already told over 8 years across multiple cities and we’re still just getting started. After all, we’re talking about Benji, NALA, and a future in African payments that’s just 1% built.