Paymob, a Cairo-based digital payments service provider, has raised $50 million to fund its expansion across the Mena region.
The series B round was led by US-based emerging markets investment company Kora Management, PayPal Ventures and London-based Clay Point.
Paymob co-founder and chief executive Islam Shawky said completing this “significant” fund-raising with the support of renowned international investors was a “a major endorsement of the strategy we have implemented to date and the scale of the opportunities we can harness”.
Last month, Paymob began its global expansion by setting up base in Pakistan. The company plans to enter Oman, Saudi Arabia and the UAE this year.
“Paymob shares our mission and ambition of advancing digital payments adoption — it has made impressive strides in supporting the growth and success of underserved SMBs [small and medium-sized businesses],” said Ashish Aggarwal, director of PayPal Ventures.
“We are honoured to be investing at a critical point in their journey, as Paymob scales game-changing solutions to bridge the FinTech gap for businesses across the Middle East and Africa.”
Founded in 2015 by Mr Shawky, Alain El Hajj and Mostafa Menessy, Paymob allows online and offline merchants to accept electronic payments from their customers using various products and solutions.
Egypt’s FinTech sector has been flourishing, thanks to the opportunity of a largely cash-based society, the support of new central bank regulations and an influx of investments.
Last year, Egyptian start-ups raised a record $491m in 147 deals and attracted the highest percentage of foreign investors in the Mena region, according to data platform Magnitt.
FinTech accounted for 17 per cent of total deals closed in the country.
In the Mena region, FinTech start-ups recorded a 183 per cent yearly growth in funding last year as the Covid-19 pandemic hastened the adoption of cashless payments, Magnitt said.
Kora Management founder Nitin Saigal said they were excited to go into partnership with Paymob “as they innovate at scale in the offline merchant acquiring and online payment gateway space”.
“The Paymob team is leveraging key structural changes taking place across Egypt and the Middle East, as these economies evolve from being primarily cash-led to a digital heavy mode of transacting,” Mr Saigal said. “We look forward to the road ahead.”
Other new investors in Paymob’s latest round included Helios Digital Ventures, British International Investment and Nclude.
British International Investment is the development finance institution of the UK government while Nclude is an $85m FinTech fund managed by Dubai-based Global Ventures and financed by Egypt’s three largest banks.
Egyptian early stage venture capital firm A15, Dutch entrepreneurial development bank FMO and Global Ventures, all existing investors, also participated, after taking part in Paymob’s $18.5m series A round last April.
The Covid-19 pandemic helped to drive growth in online payments as consumers turned to digital payment channels, forcing businesses to adapt. The number of merchants and Paymob’s monthly volumes grew by four times a year in December, the company said.
The payments provider has signed up more than 100,000 merchants during the past two and a half years — part of its plan to reach a million small and medium enterprises across the region.
Paymob’s products include bank cards, mobile wallets, QR payments, card instalments, consumer finance and buy now, pay later offerings.
In November, the company teamed up with Mastercard to launch tap-on-phone contactless payments in Egypt.
The $68.5m raised by Paymob makes it one of the most well-funded start-ups in the region. Nasdaq-listed mass transit app Swvl raised $42m in 2019 in what was Egypt's largest series B round then.
Last September, Egypt's MNT-Halan raised $120m, the largest amount of financing in the Mena region.