Even though Egyptian startup, NowPay, has raised more than $2 million from investors so far, it would not be relying on the funds to make its product work fully. To that effect, the startup has signed a partnership deal with Export Development Bank of Egypt for a credit facility to fund its current salary advances product and to cover adding more products.
“We believe that the cooperation with Export Development Bank of Egypt will assist in growing our current business model in addition to offering more innovative fintech products to users,” said Gehan Fathi, Head of Financial Partnerships at NowPay.
The latest partnership deal is one of the earliest in Egypt between a traditional bank and a fintech company. In 2020, National Bank of Egypt announced the purchase of a 24% stake in fintech startup Aman. Fawry and Banque du Caire have equally established a joint remittance service, while Banque Misr has partnered with Masary, a digital payments app.
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With this, the line between fintechs and banks is getting thinner in the North African country. Nigeria, Africa’s fintech hotbed, recently saw a new regulation from its central bank mandating fintech startups to get the approval of the apex bank before partnering with any bank in Nigeria as regards the startup’s products and services.
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A Look At What The Startup Does
- Founded by Mostafa Ashour and Ahmed Sabry, NowPay launched the financial wellness platform in 2019 to enable corporates to offer salary advances to their employees. They’ve recently also added Gehan Fathi, who previously worked as Managing Director at EFG (and joined this round as an angel) and Mahmoud ElHosseiny who managed Egypt sales for Fortune 500 company Stanley-Black Decker to their executive team.
- The employees of companies that partner with NowPay can request their salary (or a part of it) at any time of the month through its mobile app.
- The account has to be validated by the employer before it can be used to request advances. Once the account is approved, they can also see the details of their salary and how much are they eligible to request as advance. The mobile app also enables users to manage and track their savings, expenses, and offers them financial recommendations. NowPay’s website says that its solution is Shariah-compliant. For employers, it is free. The employees, however, are charged a fee every time they use it.
- Mostafa Ashour, the co-founder and CEO of NowPay who previously led the innovation teams at Microsoft Research said that their solution is currently being used by over 70 entities which includes a mix of publicly listed companies, multinationals, and startups. Some of those companies are Domty, MNHD, Sodic, Axa, Trella, Elmenus, and Wuzzuf.
- The solution offered by NowPay helps employers improve employee happiness, productivity, and corporate loyalty, without any changes in their cash flow as the money is offered by NowPay. For employers, it is pretty much business as usual. They are only supposed to deduct the advance amount and fee from the salary at the end of the month (or whenever they pay the salaries) and pay it to NowPay directly.
- So far, the startup has raised $2.7 million from investors, including from leading investors such as Beco Capital, 500 Startups (MENA), Plug and Play, 4Dx Ventures, MSA Capital, EFG-EV Fintech, Ebikar; as well as angels including Quirky Ventures, Gehan Fathi and Rolaco.
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
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