In a country where 50% of the 100 million people are active smartphone users, two in three individuals have little or no access to formal financial services in Egypt.
As banks do their best to deepen financial services to underbankers and without banks across the North African country, startups are also playing their part. One such provider is Cairo-based Khazna — a self-described “financial super-app” that has raised $38 million in Series A debt and equity.† The company has received a total of $47 million since its start†
Founded by Omar Selah, Ahmed Wagueeh, Fatimah El Shenawy and Omar Salah in 2019, the company offers basic banking and various financial services aimed at middle and lower income earners.
The entry-level product was a wage-earning access product launched in 2020. Called Khazna HR, this product allows partner employers to offer their employees partial or full cash advances.
Access to wages earned is gaining significant investor interest in several emerging markets such as India, Nigeria, and Indonesia, where startups help workers — white and blue collar — access their salaries in real time. It’s part of a financial inclusion game that saves these consumers the stress of running out of money or taking money from predatory lenders†
Some of these providers, such as Refyne, Earnipay, Wage and NowPay, another Egyptian platform, offer this as a standalone service. But for Khazna it is just now one of many services sold to consumers. Since securing an undisclosed starting round, which falls from a certain deduction between $8-9 million, Khazna has added offers such as buy now, pay later, bill payments and a prepaid debit card. Similar providers in Egypt are Telda and Sympl.
“We are much more of a super app than a digital bank because we, beside to financial services, launched multiple non-financial services also on the app,” CEO Selah said, answering questions about whether Khazna is yet another digital bank.
“How the products are designed and the merchants we are associated with all align with the needs and interests of low-to-middle-income Egyptian users.”
Khazna’s BNPL service is available in 1,000 retail stores across the country, the chief executive said. He also said that the platform has 150,000 users across all of its products. Khazna plans to launch Additionally year-end products; this product expansion and user growth is what Selah points to when asked how Khazna stays ahead of the competition.
Meanwhile, a key highlight in Khazna’s journey is his commitment to following the Central Bank of Egypt’s (CBE) pursuit of financial inclusion and a ‘less cash’ framework. But that is not everything. According to the CEO, the startup will try to leverage the bank’s infrastructure for a number of services in the pipeline.
“We are aligned with the vision of CBE and Khazna, at its core, believes world-class financial services should be available to everyone† They’re getting started multiple initiatives that we are part of, including the instant payment network where we will offer a number of services, such as instant payments through this infrastructure.”
The Egyptian startup has a team of 70 people, whose leadership team includes former executives from WorldRemit, Uber, Jumia and Match Group. The startup’s next goal, Selah says, is to increase the number of Egyptians using its financial super-app to 1 million by the end of 2022.†
It will rely on this recent funding led by Quona Capital to be carried out on that front. Khazna is the second impact investor check in an Egyptian startup after B2B e-commerce company Capiter†
The round received participation from Nclude (the VC fund launched by three Egyptian banks and Dubai-based Global Ventures), Speedinvest, Khawarizmi Ventures, Algebra Ventures, Accion Venture Lab and Disruptech, among others.
“In just now two years, Khazna has scaled and made money fast and is already a leader in driving financial inclusion for Egypt’s 35 million underbanked,” said Monica Brand Engel, co-founder and managing partner of Quona, in a statement.
“By empowering consumers and micro-enterprises with Khazna’s convenient, user-centric and transparent financial super app, millions of people across Egypt can take greater control of their financial lives. Quona is incredible excited about Khazna’s roadmap to be the leading digital super app for inclusive finance in Egypt.”
Lendable, an emerging market lender, provided the company’s debt financing. Arab Bank Egypt was said to have facilitated the debt transaction between both parties as the “security agent”.