The Cairo-based startup is centre-stage of a fintech boom across Egypt, as it makes strides for fincancial inclusion.
Egyptian super-app, Khazna, has announced the raise of $38 million Series A round in equity and debt, as it continues to spread its fintech products across Egypt. The equity side of the investment was led by US-based impact investor, Quona Capital, with participation from recently launched fund, Nclude by Global Ventures, Austria’s Speedinvest, KSA’s Khwarizmi Ventures and Egypt’s Algebra Venture, as well as Accion Venture Lab, Disruptech, AB Accelerator by Arab Bank and CVentures.
The debt financing, meanwhile, was led by UK financing platform, Lender, though the equity/debt ratio of the raise hasn’t been revealed.
The impressive rounds marks another notch on the collective belt of the Egyptian fintech sector that is on the rise. Egyptian fintech startups raised $159 million in 2021, an impressive jump from 2020’s $37.1 million. The number of startups finding investment also experience a small but significant bump, rising from 25 in 2020 to 32 2021. The best is yet to come, though, especially considering that the fintech sector in Egypt is still somewhat nascent. Around 43% of startups operating in the space are said to be looking for seed funding, while 32% are still at pre-seed or bootstrapping stages.
Khazna is one of the few remaining out of that equation and stands as one of the country’s leading fintechs. Founded in 2020 by Omar Saleh, Ahmed Wagueeh, Fatimah El Shenawy and Omar Salah, the Cairo-based startup aims to cater to the 35 million underbanked Egyptians by providing online financial services for users who do not regularly have access to formal banking services - but do have access to smartphones. Their main concept is to give users the opportunity to pay, save, borrow and insure, in many cases, eliminating the need to physically go to the bank.
The startup’s first product was Khazna HR, which offers a salary cash advance option for employers that can be activated for employee emergencies, while in 2021, the startup launched a first-of-its-kinds prepaid card will offer users 24/7 access to their wages, feeding into the ultimate goal of moving towards a cashless society.
“In just two years, Khazna has scaled and monetised quickly and is already a market leader in the push for financial inclusion for the 35 million underbanked in Egypt,” said Monica Brand Engel, co-founder and Managing Partner at Quona. “Empowering consumers and micro-businesses with Khazna’s convenient, user-centric, and transparent financial super app can enable millions across Egypt to gain greater control over their financial lives.”
The raise comes off the back of Khazna’s selection to participate in the inaugural edition of the Last Mile Money Accelerator, a programme managed by IDEO and funded by the Bill & Melinda Gates Foundation. With a focus on inclusive financial technology, the four-month programme aims to supercharge startups with grant capital, world class design support from IDEO and IDEO.org, and connections to key strategic ecosystem partners. And so while it isn’t clear how Khaza will channel this investment, it’s clear that there are big things ahead for Khazna and the financial technology revolution that’s sweeping across Egypt and other emerging markets around the world.
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