Two out of every three Egyptians have little or no access to official financial services, despite the fact that 50 percent of the country’s 100 million citizens own smartphones. While banks work hard to provide financial services to the underbanked and unbanked in the North African country, startups are also contributing. Khazna, a Cairo-based “finance super app” that has secured a $38 million Series A in debt and equity, is one such service. Since its establishment, the firm has received a total of $47 million in funding.
Omar Saleh, Ahmed Wagueeh, Fatma El Shenawy, and Omar Salah formed the firm in 2019 to provide basic banking and financial services to middle- and lower-income earners. Its first product, introduced in 2020, was an earned salary access offering. This solution, dubbed Khazna HR, allows partner firms to provide financial advances to their employees in part or in whole.
Earned pay access is attracting a lot of attention from investors in emerging economies like India, Nigeria, and Indonesia, where firms are assisting white-collar and blue-collar workers to receive their salaries in real time. It’s all part of a financial inclusion strategy that spares these people the worry of running out of money or having to borrow money from unscrupulous lenders. Some of these companies, such as Refyne, Earnipay, Wagely, and NowPay, an Egyptian platform, provide this as a separate service. However, for Khazna, it’s only one of several services offered to customers.
Khazna has introduced features like purchase now, pay later, bill payments, and a prepaid debit card after securing an undisclosed seed financing, which from some deductions falls between $8-9 million. Telda and Sympl are two similar Egyptian suppliers. “We are much more of a super app than a digital bank since we have introduced numerous non-financial services on the app in addition to financial services,” CEO Saleh stated in response to a query about whether Khazna is yet another digital bank.
“The way the items are developed, as well as the merchants with whom we are affiliated, are all in accordance with the demands and interests of low- to middle-income Egyptian customers.” According to Khazna’s CEO, the BNPL service is offered in 1,000 merchant locations around the nation. In addition, he stated that the platform had 150,000 users across all of its offerings. Khazna intends to offer new goods before the end of the year; when asked how Khazna remains ahead of the competition, Saleh cites to product expansion and user growth.
Meanwhile, Khazna’s commitment to supporting the Central Bank of Egypt’s (CBE) drive for financial inclusion and a “less-cash” environment is a major highlight of the company’s path. That’s not all, though. According to its CEO, the firm will try to use the bank’s infrastructure for some of the services it has planned. “We share CBE’s objective, and Khazna thinks that world-class financial services should be accessible to everyone.” They’re launching a number of projects in which we’re involved, including an immediate payment network via which we’ll be able to provide services such as instant payments,” he explained.
The Egyptian firm employs 170 employees, including former executives from WorldRemit, Uber, Jumia, and Match Group in its leadership team. According to Selah, the startup’s next objective is to reach a million Egyptians using their financial super app by the end of 2022. On that front, it will rely on the latest funding spearheaded by Quona Capital. After B2B retail e-commerce business Capiter, Khazna is the impact investor’s second investment in an Egyptian startup.
Nclude (a venture capital fund created by three Egyptian banks and Dubai-based Global Ventures), Speedinvest, Khawarizmi Ventures, Algebra Ventures, Accion Venture Lab, and Disruptech were among the investors in the round. “Khazna has developed and monetized swiftly in only two years, and is already a market leader in the quest for financial inclusion for Egypt’s 35 million underbanked,” Monica Brand Engel, Quona co-founder and managing partner, said in a statement.