MoneyFellows, an Egyptian fintech startup has secured $31 million in Germany’s CommerzVentures, Middle East Venture Partners, and Kuwait’s Arzan Venture Capital-led series B round to accelerate its exponential growth by diversifying its portfolio of services and expanding its product offerings across the B2C & B2B verticals, as well as its geographical expansion across Africa and Asia, the startup said in a statement on Sunday.
The series B round, which is the startup’s fourth funding round since 2018, also received participation from South Africa’s Invenfin and Kuwait’s National Investments Company, as well as existing investors, such as ParTech, Egypt’s Sawari Ventures, Africa-focused 4DX Ventures, and P1Ventures.
Speaking on the funding round, Ahmed Wadi, founder and CEO of MoneyFellows said, “We are proud to share with our stakeholders and our users the progress and growth which led Money Fellows to become one of the market-leading FinTechs in Egypt, facilitating financial inclusion and digital transformation in the country. We wouldn’t have reached such an important funding milestone without the firm backing of our existing investors who understand and support the company’s vision as well as the perseverance and belief of our new partners in the company and the team’s ability to execute. The support we received from leading local and global venture capital firms in times of instability and scarcity of growth capital rounds is a testament to their faith and confidence in our business model, our team, and the overall opportunity that lies in the Egyptian market.”
What you should know about MoneyFellows
Ahmed Wadi, founder and CEO of MoneyFellows
MoneyFellows, which was founded in 2016, is a mobile-based platform that digitizes money circles or rotating savings and credit associations (ROSCAs), also known as “Gaameya” in Egypt and other Arab countries. A rotating savings and credit association is a group of people who work together to form an unofficial financial institution. Through the platform, users can effectively manage and plan their financial obligations, as well as achieve their financial goals.
According to MoneyFellows, 2.4 billion people worldwide use money circles through traditional channels, making the market largely untapped and ripe for disruption.
Commenting on behalf of the lead investors, Hangwi Muambadzi, venture partner at CommerzVentures said “Rotating savings and credit associations have been deeply embedded in emerging markets across the world for centuries. It is brilliant to see this new digital ROSCA-driven model emerge from Africa, creating a trusted model of delivering financial solutions and setting a new standard on using localized solutions to solve for global opportunities.”
MoneyFellows has partnered with several payment providers and financial institutions since its inception, including Fawry in 2019, Banque Misr and Mastercard in 2021, and Vodafone Cash this year, to continue to provide seamless service to its over four million app users and more than 250,000 active users.
MoneyFellows has now raised $36.6 million in total funds, beginning with $600,000 in a seed round from 500 start-ups and Dubai angel investors. It plans to raise $1 million in 2019 and $4 million in 2020.
Insight into the African Fintech Sector
According to The Big Deal report, a database tracking and sharing insights on start-up funding on the continent, the fintech sector has remained the most-funded startups sector in the African tech ecosystem in the first half of 2022, with 32 percent (half) of the funding realized in the first half of 2022 going to fintech startups, which is higher than in previous years, where most of the fintech funding was raised in the second half, 89 percent in 2019, and 76 percent in 2020.
Furthermore, according to Magnitt’s report released in August, in H1, 2022, the fintech sector remained the most well-funded startup sector in emerging markets. More than tripling to nearly $1.68 billion in the first half of 2022 from the same period in 2021.
According to the report, while roughly two-thirds of the capital deployed was raised in the first quarter of the year, funding fell by 52% in the second quarter and the number of deals fell by 44%.
The report further explained that while about two-thirds of the capital deployed was raised in the first quarter of the year, there was a drop in funding of 52 percent in the second quarter and a 44 percent slide in the number of deals.