Money Fellows - Afrikan Heroes

Arzan Capital’s Investment in Egypt’s Money Fellows Totals $4 Million

July 24, 2023

Arzan Venture Capital (AVC) has announced it has strategically invested $4 million in the Egyptian fintech startup, Money Fellows, from its new fund. This significant investment marks a pivotal moment for both Arzan Venture Capital and the startup as they join forces to transform traditional money circles prevalent in the region.

The remarkable surge in Arzan Venture Capital’s investment volume, an unprecedented 81% increase since 2022, has been attributed to the resounding success of their second fund (AVC II) and the imminent launch of their forthcoming third fund (AVC III). The highly anticipated AVC III, which is nearing its first close, aims to make new investments amounting to $60 million on the esteemed Abu Dhabi Global Market (ADGM). Notably, Money Fellows has become a prime focus of AVC III’s investment strategy, with the fund making three substantial investments (amounting to $4M) in the Egyptian fintech startup, already.

Money Fellows’ innovative approach to digitizing the traditional concept of money circles, commonly known as ROSCAs, has garnered significant attention. By providing users with enhanced credit and savings pooling capabilities, the fintech platform offers a scalable, secure, and efficient process. This appeal has led to an impressive $31 million raised in a series B fundraising round in October 2022, with the participation of leading local and global venture capital firms, including Arzan Venture Capital.

“This is the second investment of our new Arzan VC Fund III and our largest ticket to date. Money Fellows embodies the kind of teams, ideas and products that we love to support; strong teams working on big ideas that change lives across the world. The innovation and uniqueness of the technology developed by the team has resulted in a highly scalable and frictionless experience for its users who traditionally opted out of the ROSCA model due to the many barriers and risks involved. We are excited to be working with Ahmed, the team and our co-investors to make this dream a reality and bring Money Fellows to the rest of the world,” said Laith Zraikat, Partner at Arzan Venture Capital, on the occasion of the series B fundraise last year.

The strategic alignment between Arzan Venture Capital and Money Fellows is underscored by the startup’s unique business model. Money Fellows generates revenue through small service fees and float interest on the money in circulation, a strategy that seamlessly aligns with AVC’s investment approach. The shared vision of empowering individuals and increasing access to credit in the region resonates deeply with AVC’s commitment to supporting transformative startups that fuel positive change.

As a result of AVC’s strategic investments, their diverse portfolio now boasts 46 companies, encompassing emerging players in various sectors, including financial technology, e-commerce, and supply chains. Among the recent additions are notable emerging companies from Saudi Arabia, such as Hala Company and Nerpay Company, alongside Money Fellows and Lucky Company from Egypt.

The extensive regional presence of Arzan Venture Capital, with offices in Kuwait City, Dubai, Cairo, Amman, Riyadh, and Karachi, reinforces their dedication to providing invaluable guidance and networking opportunities to the startups they invest in. This partnership promises to drive significant growth and foster a dynamic ecosystem for emerging technology companies across the MENA+P region.

Egyptian Fintech Startup Money Fellows Raises $31M In Series B Funding Round

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

Egyptian Fintech Startup Money Fellows Raises $31M In Series B Funding Round

October 31, 2022

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.

Ahmed Wadi, founder and CEO of Money Fellows

“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.

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.

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.

The company maintained eight times year-over-year growth while adding hundreds of thousands of new monthly active users.

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Charles Rapulu Udoh