From rejections to $40m – an entrepreneur’s rocky road to success

When Benjamin Fernandes returned to Tanzania in 2017 after completing his MBA in the US, he had a plan: build a digital money transfer company from the ground up. What followed was a turbulent path marked by investor rejections, threats from large competitors and a failed first product. Yet last year, Nala – his cross-border payments startup – raised $40 million from global investors.

Speaking at the recent Africa CEO Forum in Abidjan, Fernandes recounted the many hurdles he faced in building the business.

Nala’s origins trace back to 2016, when Fernandes began working on the idea while studying at the Stanford Graduate School of Business on a full scholarship. He and his sister were the first in their family to attend university. A year later, he returned to Tanzania to launch the company. At the time, he stayed at his mother’s house in Dar es Salaam.

Nala began as a local money transfer service in Tanzania. Fernandes faced repeated rejection from potential backers. He applied to every startup accelerator in the country without success and submitted six applications to Y Combinator, the prominent Silicon Valley programme. In 2019 – after two and a half years of trying – he was finally accepted into Y Combinator.

But more troubles soon followed. Fernandes received a cease-and-desist letter from Tanzania’s largest mobile money service, and the country’s central bank instructed him to shut the operation down.

One week before pitching at Y Combinator’s Demo Day – where entrepreneurs present to potential investors – Fernandes’ co-founder quit the business, unable to handle the stress.

Now without a technical co-founder and facing a loss of investor confidence, Fernandes tried to keep the company afloat. Several backers who had planned to invest withdrew. He started hustling for small sums from a broad group of angel investors.

By 2020, the company’s model was no longer viable. It had not achieved product-market fit, and the Covid-19 pandemic compounded its challenges. “I had to fire everyone – we went down to four employees,” Fernandes said.

He decided to shift the business towards cross-border money transfers, targeting Africans in the diaspora who wanted to send funds to relatives back home.

Many of his investors were sceptical, citing the number of established players already operating in the space. Fernandes went ahead with the new direction anyway.

Towards the end of 2021, he flew to London on a tourist visa and spent time in neighbourhoods with large African populations. He visited mosques on Fridays and churches on Sundays, speaking to people and asking how they sent money home. All of Nala’s first 1,000 customers came from those interactions. Fernandes said he still has their contact details saved on WhatsApp – and showed the list to the audience at the Africa CEO Forum.

Armed with this early traction, Fernandes raised $10 million in 2022.

He told his team: “I want us to … make at least $10 million in revenue and become profitable with this $10 million.” Despite doubts from others about whether that would be possible, the company achieved the target just over two years later.

Nala has since expanded beyond the UK, launching in the US and Europe, and enabling users to send money to multiple African destinations.

In 2024, Nala raised $40 million from venture capital firms including San Francisco-based Acrew Capital, DST Global Partners, Norrsken22 and HOF Capital, with plans to use the funds to grow its consumer business beyond Africa, and build its business-to-business payments platform, Rafiki.

Despite the company’s growth, Fernandes spoke candidly about the difficulties of building a fintech business in Africa. Nala has expanded into several Asian markets, including India, Bangladesh, the Philippines and Pakistan. Still, he said: “The hardest Asian market was easier than my easiest African market.”

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