Damala was born at Piraeus, Greece on 15 January 1855 to an aristocratic family. He was the second of three children to Ambrosios (Ambrouzis) Damalas (2 June 1808 – 29 July 1869), a wealthy shipping magnate, who later served as mayor of Ermoupoli and Piraeus and his wife, Calliope Ralli (6 June 1829 – 14 February 1891), whose father, Loukas Rallis, had also once served as mayor of Piraeus and Ermoupolis, Syros (he had also came up with the name "Ermoupoli") and was a member of the Executive Committee which attempted the liberation of Chios in 1827, during the Greek War of Independence. The other two children of Ambrouzis and Calliope were a son, Paul (Pavlos) Damalas (17 July 1853 – 25 December 1925) and a daughter, Eirini (ca 1857 – ?). The family later moved to Marseille, France, where they spent several years, until they relocated to Ermoupoli, Syros, after Ambrosios was appointed mayor there. The family later returned to Marseille and eventually to Piraeus.