Cash is the predominant method of sending and receiving payments in the Middle East. If you owe someone a cup of coffee or a trip for an extended period of time, cash back is your best bet. This is one of the many financial problems that have not been approached In the region.
The good news is that startups are springing up to provide solutions. Last month, Telda, an Egyptian start-up for two months now, raised an impressive sum as a pre-seed to offer digital banking services. Today, Ziina, another Dubai-based startup, has secured $ 7.5 million seed funding to expand its peer-to-peer (P2P) payment service in the Middle East and North Africa.
Ziina succeeded in recruiting the best global investors and founders of fintech in the cycle. Avenir Growth and Class 5 Global led this final round of financing. Wamda Capital, FJ Labs, Graph Ventures, Goodwater Capital, Jabbar Internet Group, Jasoor Ventures from Oman Technology Fund and ANIM also participated.
The founders who participated are Guillaume Pousaz, CEO of Checkout via his investment fund Zinal Growth; Krishnan Menon, CEO of BukuKas, as well as executives of Paypal and Venmo. This adds to a list of executives and early employees from Revolut, Stripe, Brex, Notion and Deel who have joined Ziina’s cycle.
According to the company, it has raised more than $ 8.6 million since its launch last year. This includes the $ 850,000 pre-seed raised in May 2020 and $ 125,000 secured after going through the winter lot of Y Combinator earlier this year..
Ziina was founded by Faisal Toukan, Sarah Toukan and Andrew Gold. It is the latest addition to the bustling Middle Eastern fintech ecosystem and capitalizes on the region’s rapid adoption of fintech-friendly regulation..
The company allows users to send and receive payments with fair a phone number – no IBAN or Swift code required as is the de facto method in the UAE and parts of the Middle East. It also claims to be the nation’s first licensed peer-to-peer social app “on a mission to simplify finances for everyone.. “
After meeting in a hackathon in the United States, Faisal and Gold began to exchange ideas on how to create wallets, wanting to reflect the successes of platforms like WePay, Paytm have had. At the time, VCs seemed to be interested in how the wallet ecosystem intersected with banking.
“The boundaries between portfolios and banking services have become really blurry. Every wallet has a banking partner, and the people who use wallets use them for their day-to-day needs, ”CEO Faisal Toukan told TechCrunch..
On the other handSarah, who is Faisal’s sister, was on her personal FinTech journey in London. There, she attended several meetings hosted by the founders of Monzo and Revolut. Using his knowledge and the experience of the other two, the founders decided that solving P2P payment issues was their own way to have a massive impact in the Middle East..
So how far have they gone? “We have launched a beta version for the market, but it is limited for regulatory reasons and essentially to keep us in check with the ecosystem, ”said Toukan. “Since then, we have been regulated. We have a banking partner, one of the three largest banks in the UAE, and we have created a new portfolio in a month. This is also what we have been working on throughout our time at YC. So it was a pretty eventful year.
The fintech sector in the MENA region is growing rapidly; in terms of digits, at a CAGR of 30%. In addition, in the United Arab Emirates, it is valued that more than 450 fintech companies will raise approximately $ 2 billion in 2022 compared to the $ 80 million raised in 2017. FinTech in the region are concentrated on the resolution of payments, transfers and remittances. Along with its P2P offering, these are the areas Ziina wants to play in, including investment and cryptocurrency services..
According to Toukan, it is not easy to make online investments and remittances are done in exchange houses, a manual process where people have to physically visit an office. “So what we’re looking to do is bring all of these products to life in the UAE and grow beyond. But the first problem we solve is that people send and receive money with two clicks, ”said the CEO.
Starting with P2P has its own advantages. First, peer-to-peer services are a repeated behavioral mechanism that enables businesses to build trust with customers.. In addition, it is a cheaper customer acquisition model. Toukan says that as Zinna gets bigger geographically – Saudi Arabia and Jordan in 2022; and Egypt and Tunisia in a few years – he wants the company’s portfolio to become essentially seamless border. “We want a situation where if you move to Saudi Arabia or Dubai, you can use the same wallet instead of using different banking apps,” he added..
Being on the right side of regulation is key to any fintech expansion. And despite the region apparently friendly fintech regulatory ecosystem, this has been a huge hurdle that Ziina had to overcome, according to Toukan. Second, find the right banking partners. “You must argue with the banks that it is essentially a mutually beneficial partnership. And the way we did it is to essentially highlighting different cases around the world like CashApp which has worked with South Bank, ”he said.
Now that the business has overcome these challenges and is in full swing to get started. Presently, Ziina has up to 1,000 users, who Toukan says processed over $ 120,000 in volume last month. The company also has 20,000 people on its waiting list for to be embarked after launch.
Ziina has already built a team with experience in tech companies like Apple, Uber, Stanford, Coinbase, Careem, Oracle and Yandex. It plans to double its hires with this new investment and the acquisition of customers and to establish commercial partnerships..