It appears as though startups in both Egypt and South Africa are benefiting from local VC funds more than their counterparts in other parts of Africa. Khazna, the fintech startup that seeks to provide mobile financial services to over 20 million underbanked Egyptians, has secured seed funding in a round led by leading Egyptian VC Algebra Ventures. The size of the investment is however undisclosed but the VC Algebra Ventures is known for co-leading investment of not less than a million dollars. Earlier this year, it co-led an $8 million investment in Elmenus, Egypt’s food delivery startup after its initial investment of $1.5 million made in 2017.
Here Is The Deal
- Joining Algebra Ventures in this round of investment is Accion Venture Lab, Accion’s seed-stage fund that recently closed $33 million in fresh funds.
- This makes Khazna Accion Venture’s first investment in Egypt.
- Khazna plans to use the investment to advance its “financial inclusion-focused products and use cases to reach the product/market fit stage by leveraging new technologies, data, and analytical tools to serve the underbanked in Egypt.’’
Why The Investors Invested
Algebra Ventures is a $50-million Cairo-based venture capital fund that invests in early-stage technology companies in Egypt and the MENA region. Its LPs include Cisco, the European Commission, EAEF, EBRD, IFC, and private family offices. Algebra has invested in 15 transformative technology companies in MENA, including HolidayMe, Trella, Elmenus, Dsquares, and Halan.
As the most known and strongest Venture Capital in Egypt, they represent the institutional money that comes into a startup. The reason why they focus on Egypt is that most of their experience is in Egypt. However, they do invest in some parts of the Middle East such as UAE and Jordan. So, mostly neighbouring countries of Egypt which represent the scope of their funding. In terms of sector, they invest basically in technology and its sub-sectors such as transport-tech, marketplaces, consumer internet, SaaS, etc.
“We’re seeing the rise of a new wave of Egyptian Fintech startups that are attracting interest from local and international investors. We’re excited to be leading this round with Khazna. Omar is an exceptional entrepreneur and we believe that he and his team will grow Khazna to be one of the most transformative startups emerging from Egypt in the next few years,” Tarek Assaad, Managing Partner with Algebra Ventures, said.
On its part, Accion’s President and CEO Michael Schlein, said:
“Egypt has made strides in recent years toward greater financial inclusion, but millions of Egyptians still struggle to access the financial services they need to build better lives. Fintech startups like Khazna are uniquely positioned to develop better, faster, safer ways to meet the needs of the underserved.”
“Accion Venture Lab is excited to expand our reach into Egypt with this latest investment in Khazna, whose holistic digital banking app and strong founding team are a valuable addition to our portfolio,” added Ashley Lewis, Senior Investment Officer for Africa at Accion Venture Lab,” he added.
A Look At What Khazna Does
Founded in 2019 by Omar Saleh, Ahmed Wagueeh, Fatimah El Shenawy, and Omar Salah, Khazna aims to provide mobile financial services to over 20 million underbanked Egyptian who it says are active smartphone users but have little access to formal financial services.
“Khazna is focused on bringing customer-centric services to over 20 million active smartphone users in Egypt who lack access to formal banking and financial services. This wouldn’t have been possible without the significant momentum created by the Central Bank of Egypt towards digitization and financial inclusion,” Khazna’s co-founder and CEO, Omar Saleh, said in a statement.
Khazna is also working with major banking and corporate partners to launch different other products that will allow users to pay, save, borrow and insure with minimal face-to-face or phone interaction. Its first product is Khazna HR, a salary cash advance app that allows employers (who partner with it) to offer cash advance to their employees as a benefit, helping them to cover for unforeseen emergencies.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer.
He could be contacted at udohrapulu@gmail.com