African FinTech Nala Plans $120 Million Fundraise for X-Border Payments

Cross-border payments startup Nala is attempting to raise $120 million in its next funding round.

The Tanzania-based company aims to reach that goal by selling an equity stake of 10% to 15%, Bloomberg reported Wednesday (Feb. 26). Nala founder and CEO Benjamin Fernandes said the company expects to raise the money near the end of 2026.

Nala raised $40 million last year to boost its expansion to markets beyond Africa and to create a B2B payments network.

FinTechs in Africa are poised to blossom along with the growth of cross-border trade in the region. McKinsey & Co. projects revenues for these companies could reach $47 billion by 2028, a five-fold increase since 2023, the report said.

“FinTech is the most-funded thing in Africa from venture capital globally, and it will be the most-funded thing for the next 15 to 20 years because payments infrastructure is so broken across the continent,” Fernandes said, per the report.

Most of Nala’s remittances originate in the United States, which provides 60% of Nala’s revenue, making it the company’s largest market. The company does business in 11 African countries.

Compliance is one of the biggest hurdles facing cross-border payments, especially as regulations tighten and scrutiny increases worldwide.

“Everything’s going more cross-border and getting regulated, so tax compliance regulation is huge for new business models in new markets,” Sovos CEO Kevin Akeroyd told PYMNTS in an interview last spring.

Faulty cross-border payments cost American merchants at least $3.8 billion in sales in 2023, according to the PYMNTS Intelligence report “Cross-Border Sales and the Challenge of Failed Payments.” In addition, 70% of U.S. firms said they experienced higher rates of failed payments in cross-border sales versus domestic sales.

However, last year marked a turning point with the rise of artificial intelligence- and machine learning-powered compliance tools, helping to detect fraud, ensure anti-money laundering compliance and verify customer identities.

Compliance is expected to become less of a bottleneck and more of a competitive advantage. These technologies will likely bring greater efficiency and security to cross-border transactions, paving the way for more seamless global commerce.