Cash is the primary medium of exchange for the purchase of goods and services in the Middle East. This is one challenge out of many financial issues that haven’t been addressed in the region.
Some startups are rising up to this challenge by providing solutions that will enable the region go cashless.
In May, Telda an Egyptian based startup raised an undisclosed sum of money to offer digital banking services not only in Egypt but in the entire Maghreb.
Ziina, a Dubai based startup has raised $7.5 million to expand its peer-to-peer payment services in North Africa and the Middle East.
Ziina was able to enlist top global investors and fintech founders in the fund raising round. Avenir Growth and Class 5 Global led this latest tranche of financing. Wamda Capital, FJ Labs, Graph Ventures, Goodwater Capital, Jabbar Internet Group, Oman Technology Fund’s Jasoor Ventures, and ANIM also participated in it.
The founders who took part include Checkout CEO Guillaume Pousaz via his investment fund Zinal Growth; Krishnan Menon, BukuKas CEO, as well as executives from Paypal and Venmo. This adds to a roster of executives and early employees from Revolut, Stripe, Brex, Notion, and Deel that joined Ziina’s round.
According to the company, it has raised over $8.6 million sinceits debut last year. This includes the $850,000 pre-seed raised in May 2020 and $125,000 secured after going through Y Combinator’s Winter batch early this year.
Ziina was founded by Faisal Toukan, Sarah Toukan, and Andrew Gold in 2020. It’s the latest addition to the Middle East’s bubbling fintech ecosystem and is capitalising on the region’s rapid adoption of fintech friendly regulation.
The company allows users to send and receive payments with just a phone number —no IBAN or swift code required as is the de facto method in the UAE and some parts of the Middle East. It also claims to be the country’s first licensed social peer-to-peer application “on a mission to simplify finance for everyone.”
“The lines between wallets and banking have become really blurred. Every wallet has a banking partner, and people who use wallets use them for their day-to-day needs,” CEO Faisal Toukan said to TechCrunch in an interview.
On the other hand, Sarah, who is Faisal’s sister, was on her personal fintech journey in London. There, she participated in several meetups headlined by the founders of Monzo and Revolut. With her knowledge and the experience of the other two, the founders decided that solving P2P payments issues was their own way of driving massive impact in the Middle East.
So how far have they gone? “We launched a beta for the market but it’s restricted for regulatory reasons and basically to keep ourselves in check with the ecosystem,” Toukan remarked. “Since then, we’ve gotten regulated. We’ve got a banking partner, one of the three largest banks in the UAE, and we’ve set a new wallet a month from now. That’s also what we were working throughout our period in YC. So it’s been quite an eventful year.”
They have expansion plans to berth in Saudi Arabia and Jordan in 2022 and in Egypt and Tunisia in some years to come. They want their services to be uniform throughout North Africa and the Middle East.
Ziina has been having constant discussions with the regulators in order not to run foul of the law and for seamless efficiency. “You need to make a case to the banks that this is basically a mutually beneficial partnership. And the way we’ve done that is by basically highlighting different cases globally like CashApp that worked with Southern Bank,” Faisal Toukan said.
The startup has thousands of users who have processed transactions worth over $120,000 in May alone. There are also twenty thousand users waiting to be onboarded. It has built a sturdy team with a great experience across great tech teams like Apple, Uber, Oracle, Yandex, Stanford, Careem and Coinbase. It also plans to use the funds raised to hire talents, invest in customer acquisition and highly strategic partnerships.
Faisal Toukan, the co-founder and CEO of Ziina, commenting on the launch, said, “With several user-centric features, Ziina will redefine the way people in the Middle East think of, interact with and experience financial services. Our company is founded on the belief that everyone should have access to the next generation of financial services.”
The startup plans to gradually introduce different new services including QR code integration, prepaid cards, and utility payments, and launch operations in Saudi next year which happens to be the largest GCC market with over 32 million people, 60 percent of which, as the statement points out, uses smartphones.
Ziina will make money by integrating different revenue streams into its products, “For POS solutions and prepaid cards, we will take a small percentage fee on all transactions from vendors,” it said in a statement.
Sarah Toukan, the co-founder and Chief Product Officer of Ziina, said, “We want to democratize access to financial services by placing one platform in the hands of every individual. For example, we want to make it possible for anyone who wishes to invest to do so easily by integrating 3rd party robo-advisors to Ziina’s platform. We will prioritize use-cases based on customers’ largest pain points and add them product by product.”
Ziina is the third start up from the United Arab Emirates to make it to Y Combinator. They have earlier raised $850,000 in a pre seed round. It has plans to expand its product portfolio to launch simplified payment offerings for freelancers and small businesses in 2021.
Faisal Toukan, the co-founder and CEO of Ziina, commenting on the occasion in January 2021, said, “The participation with Y-Combinator is a game-changer for Ziina and we are thrilled that we have fallen into the very small bracket of companies who are accepted. We’re excited to tap into Y-Combinator’s larger network, including its exceptional talent and investor pools. Furthermore, it also allows us to have access to mentors from top technology companies, which will propel Ziina to an even higher level when it comes to scaling our operations.”
He also said that they’ve received an enthusiastic response from VCs and angels in their latest funding round, “This will contribute to supercharging Ziina’s growth in the year ahead, achieving the goals we’ve set. Through Ziina we want to help redefine the way people in the Middle East think of, interact with, and experience financial services. Our company is founded on the belief that everyone should have access to the next generation of financial services.”