Money Fellows, an Egyptian fintech business, has raised $31 million in a series B fundraising round headed by CommerzVentures as it seeks to expand internationally.
Along with previous investors Partech, Sawari Ventures, 4DX, and P1Ventures, the investment round also included Middle East Venture Partners, Arzan Venture Capital, Invenfin, and National Investment Co.
“The support we received from leading local and global venture capital firms in times of instability and scarcity of growth capital rounds is a testament to their faith and confidence in our business model, our team and the overall opportunity that lies in the Egyptian market,” Ahmed Wadi, founder and CEO of Money Fellows said in a statement.
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Money Fellows plans to use the money to diversify its product offerings into B2C and B2B markets.
A Look At MoneyFellows
Founded in late 2016 by Ahmed Wadi, MoneyFellows is digitizing concept of money circles (ROSCAs), commonly known as gam’eya in Egypt and other Arab countries.
The years-old practice that is common across many countries in the world, known as chit funds in India, committee in Pakistan and Tandas in Mexico, allows a group of people (normally friends or coworkers) contributes a fixed installment every month to a pool with one of the members taking whole pool as payout every month. The circle ends when everyone receives their payout and is usually repeated if the participants are interested.
MoneyFellows with its group pooling platform for credit and savings is digitizing the entire process of money circles with a scoring model that compliments current offline model, making it more scalable, safe and efficient.
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How The Startup Works
The users set up their profile on MoneyFellows and upload documents to verify their income and personal details. The more information and verification documents they share, the better their score and limit. Depending on MoneyFellows’ credit assessment, a user is then shown different matching circles. The user then selects one of these circles, a preferred (available) slot, and mode of payment and payout.
MoneyFellows makes money by charging a small service fee on monthly installments paid by the members.
“Our business model is currently comprised of collecting service fees from our users depending on their payout position in the money circle — starting with 5% fees for users with early payouts at the beginning of the circle, incrementally decreasing to zero fees for users paid out at the end of the circle. With millions of dollars moving through our accounts MoneyFellows are able to earn a percentage of float interest on our money in circulation. We are also planning to introduce several new options to generate revenue, including allowing our users to utilize MoneyFellows for bill payments, as well as using MoneyFellows in a variety of merchant locations,” explained Ahmed in a conversation with MENAbytes, an online magazine for tech startups in MENA region.
Originally started in the United Kingdom, MoneyFellows moved its headquarters to Egypt later.
According to a press statement, 2.4 billion individuals use money circles through conventional means internationally, therefore the company is trying to expand markets in Africa and Asia.
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The company maintained eight times year-over-year growth while adding hundreds of thousands of new monthly active users.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert.
As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard. You can book a session and speak with him using the link: https://insightsbyexperts.com/view_expert/charles-rapulu-udoh