Egypt’s digital lending startup Shahry has emerged from stealth after building its product quietly for over a year and has raised $650,000 in pre-seed funding from the investment arm of Egbank, a leading Egyptian bank, the first time an Egyptian bank has invested directly in a local fintech.

“It is a big upside for us as we can leverage the bank’s expertise in credit risk, raising loan capital. In a market like Egypt which is generally risk-averse, a bank putting money in a startup is quite a shift in mentality in the financial sector towards fintech, technology, and risk capital,” Co-founder Sherif ElRakabawy said. 

Here Is What You Need To Know

• With this investment, Shahry plans to grow its loan portfolio and scale the business.
• In a statement Sherif said that their demand has been exploding, growing at 100 percent month-over-month since the soft launch in July 2019:

“While Shahry is for everyone, we can see Egypt’s un- and underbanked, who live outside of the formal banking system, as being our largest customer segment. Those are people who need access to finance most, and we try to help them make ends meet.”

• Sherif also explained that they’ve been able to acquire 15,000 users with little to no marketing.

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Why The Investor Invested

Egbank has been active in the Egyptian startup ecosystem for over two years but that has been mostly through its accelerator program that it runs in partnership with Cairo Angels for early-stage startups in the country.

“We see great potential in Shahry and the area of financial non-banking services in Egypt, and are looking into investment opportunities that offer innovative solutions for lending. In alignment with this belief, we strive to complement the vision and destination of Egbank, aiming to center the youth at the heart of its organization and support young entrepreneurs and innovation,” Mohamed Moheyeldin, the CEO of Egyptian Gulf Holding for Financial Investments (the investment arm of Egbank), said.

A Look At What Shahry Does

• Founded in early 2019 by Sherif ElRakabawy & Mohamed Ewis, Shahry which the startup says, uses proprietary AI-based credit scoring engine, enables users to apply for virtual credit through its mobile app that they can then use to purchase different products (without leaving Shahry’s app) from different online shopping platforms and stores, which for now includes Souq, and pay for these products in monthly installments.
• The application follows a simple process requesting some details from the users on a single page. The users receive a confirmation about the status of their application within a day.
• The buy now pay later startups normally work with ecommerce platforms to offer their service as a payment option to their customers during the checkout but Shahry has taken a different direction by enabling people to browse the products and checkout on its app without having to log on to store’s website or app. Even for returns, the users get in touch with Shahry and they help them submit the request to the store.

“We deliberately chose to include the shopping within the app to provide seamless user experience as with it, you can basically get activated and order in one place.”

“The rationale here is that you need to get activated through the app first before you shop, so why not do both in one app. That being said, we’re also working in parallel with online merchants for integration as a payment method for additional reach,” co-founder Sherif said.

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.