Egyptian FinTech company Money Fellows has raised $31 million to diversify its portfolio of services and expand across Africa and Asia, the company said on Sunday.
The series B round, its fourth funding round since 2018, was led by Germany's CommerzVentures, Middle East Venture Partners and Kuwait's Arzan Venture Capital.
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 also participated in the round.
"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,” said Ahmed Wadi, founder and chief executive of Money Fellows.
“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."
Founded in 2016, Money Fellows is a mobile-based platform that digitises money circles or rotating savings and credit associations.
A rotating savings and credit association is a group of individuals who together act as an informal financial institution, known as "gameya" in Egypt and other Arab countries.
The market is largely untapped and ripe for disruption with 2.4 billion people globally using money circles through traditional channels, according to Money Fellows.
"Rotating savings and credit associations have been deeply embedded in emerging markets across the world for centuries," said Hangwi Muambadzi, venture partner at CommerzVentures, which manages €550m ($548m) across three funds.
"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 localised solutions to solve for global opportunities."
It has raised a total of $36.6m, starting with $600,000 in a seed round from 500 start-ups and Dubai angel investors. It raised $1m in 2019 and $4m in 2020.
The app has more than four million downloads and more than 250,000 active users.
The financial technology industry remained the highest funded sector across emerging venture markets in the first half of 2022, more than tripling to almost $1.68 billion in the first half of 2022 from a year ago, a report from Magnitt showed in August.
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 per cent in the second quarter and a 44 per cent slide in the number of deals, the start-up data platform said in the study.
Payment solutions was the top subsector for investors in 2022, attracting 42 per cent of all investments made in FinTech, with an annual funding growth of 152 per cent, Magnitt said.
Magnitt's study showed FinTech investments in Middle East and Africa totalled $561m, with Nigeria the top destination, driving a third of the total. The African nation, along with the UAE, Egypt, Kenya and South Africa, accounted for three quarters of total FinTech investments.