Generation Start-up: How graduating from a DFSA scheme is helping FinTech Mamo branch out

Completing the Innovation Testing Licence programme to become a DIFC company was tougher than launching the start-up, co-founder and chief executive Imad Gharazeddine says

Mamo founders Imad Gharazeddine and Asim Janjua. Photo: Mamo
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Setting up a venture and lifting it off the ground is a massive struggle for any entrepreneur and many perhaps would describe it as the most challenging part of their entrepreneurial journey.

However, little did Imad Gharazeddine and his co-founder know what rigours awaited them when their venture, Mamo, was accepted into the Dubai Financial Services Authority’s coveted regulatory sandbox programme.

Before being accepted into the DFSA’s Innovation Testing Licence (ITL) programme, like all entrepreneurs, Mr Gharazeddine and co-founder Asim Janjua experienced the usual initial struggles, be it conceiving the right idea, developing a workable business model or going through the licensing process.

Building the team and finding the right talent was the biggest challenge the co-founders faced in the initial days. But being ex-Google colleagues with a proven track record of success made raising initial funding relatively easy for the duo.

However, once Mamo — a FinTech and financial services platform for small and medium enterprises — was accepted in the ITL programme in June 2021, their challenges easily trumped whatever the founders had faced before that.

“I would say it was much more difficult to graduate from it,” says Mr Gharazeddine, who is also chief executive of Mamo.

Before they entered the ITL programme, the co-founders were mostly focused on “pre-product activity” and getting prepared to be accepted into the regulatory sandbox, which “didn’t really have as much heavy lifting behind it”.

“But then graduating from it … and all the things we had to go through, all the checks that had to be done, all the systems that had to be built — it took us a full year.”

The Mamo team. Photo: Mamo

Launched in 2017, the ITL is a programme that enables approved companies to test new and innovative financial products, services and business models in and from the emirate’s financial hub, Dubai International Financial Centre, within a restricted regulatory environment.

As of July, a total of 130 companies have applied to enter the programme and only 67 applicants have been accepted. The number of graduates who went through the rigours of the programme successfully is much lower.

“Once you're in the programme, it's a whole series of requirements that you have to meet and things that you have to have in place internally,” Mr Gharazeddine says.

“It covers everything from the way your company is governed to the risk, fraud and compliance measures that you have built to handle the activities that you're licensed for.”

Mamo built all internal processes from scratch and it took the team a lot of time and effort. Throughout that, “you end up having reviews done on your company by the regulator”, he adds.

All that effort was worth it as at the end of it all was the grand prize: the DFSA approval to become an authorised company and set up operations within the DIFC, one of the top financial hubs in the Middle East, Africa and South Asia region.

Mamo received the regulatory nod earlier in October to allow the company to carry out regulated money services and further expand its products and services without user restrictions.

Now that the rigours of being in one of the toughest regulatory sandbox environments are over, Mr Gharazeddine says Mamo can explore all new avenues of growth.

Mamo, which allows its users — both small businesses and individuals — to send and receive payments through their smartphones instantly, has rapidly expanded its team to about 30. Most of the hiring was done this year and there is no limit to what the company can achieve in terms of growth, he says.

In the past 12 months, its client base has expanded by more than 600 per cent. Most of them are SMEs from industries including fitness, meal plan providers, gift shops or “anybody really who's too small to be serviced by larger banks”.

“We have over 1,000 clients today and the number is growing dramatically after the graduation to a full licence because we no longer have limits on how many customers we are allowed to on-board,” Mr Gharazeddine says.

The number of Mamo clients will probably grow to 1,500 to 2,000 by the end of this year. Growth will further accelerate next year as Mamo plans to add more products and further improve the platform.

“By the end of the next year, we are looking at anywhere between 5,000 to 10,000 customers,” says Mr Gharazeddine.

Mamo, which makes a small percentage on each transaction that is processed through its platform, has also expanded its revenue by five times year-on-year and it is looking to expand its operations beyond the UAE's borders.

“The aim is to continue that growth and start looking forward to new markets that we will enter in the Middle East and North Africa region,” Mr Gharazeddine says.

Saudi Arabia, the biggest Arab economy, is next on Mamo’s radar and Mr Gharazeddine says the third quarter of the next year will be a “decent target for actual entry, or at least going live with a minimum viable product there to test”.

“Where the pain points lie in the SME segment, or the consumer segment over there [in Saudi Arabia], will guide us on who we're going after in terms of customers,” he says.

Mamo founders Asim Janjua and Imad Gharazeddine. Photo: Mamo

“But definitely, it will make a huge, huge impact on our top and bottom lines.”

The rest of the GCC markets are next, where Mamo plans to expand before Egypt, where the market is already “a little bit crowded with FinTechs”, he adds.

The speed of expansion beyond Saudi Arabia “really depends on how much we succeed in going to the second market and what learning we get”, Mr Gharazeddine explains.

The company, which expects to be profitable in “another year or so” would still require funding to expand operations. Mamo has so far raised $9.5 million, including $8m in May last year.

“We're good for now and we have a few more milestones and key metrics that we want to get to before thinking about raising the next round,” he says.

Q&A with Imad Gharazeddine, chief executive and co-founder Mamo Pay

Who is your role model and what is your mantra of success?

I have several role models that I lean into, depending on the situation and circumstances. For example, I love Charlie Munger and Warren Buffett when it comes to the stock market, and life decisions that require an understanding of second order impact. I’m constantly reading, learning and understanding topics on leadership, and one person I appreciate is Bill Campbell, who helped to build some of Silicon Valley's greatest companies including Google, Apple and Intuit.

Are you a risk-taker or a cautious entrepreneur?

It depends. I love taking risks where good educated analysis has been done. If it fails, I feel more comfortable that I tried it in the best possible way I could. As an entrepreneur I need to constantly evaluate the risk and reward of everything. It’s never black or white, though. What I find to be most important and useful is to be calm and collected, so that decisions are not made in an emotional state, especially when it comes to big decisions.

What successful start-ups do you wish you had started and why?

I always wanted to be in the financial services sector. It is both a passion and a huge pain point globally and here in the UAE, and closer to home. I actually look forward to work and wake up excited. As such, there is nothing else I wish to be working on except Mamo, and I have no doubt that it will be extremely successful.

Where do you see the company five years from now?

In five years, we would love to see Mamo become the first choice for SME financial services. In the past two years, we have learnt so much about SME financial services and banking.

What would you change if you had to do it all again? What mistakes would you like to correct?

First and foremost, begin sooner, especially with regulated products. I also underappreciated the nuances and power of leadership. I wish I had spent more time sharpening that skill in my 11 years at Google. What I have learnt in the three years of starting Mamo feels like multiple MBAs at once. I personally don’t focus on mistakes in a way that pulls me back. Every “mistake” for me is no different than learning a new thing. It is the response to the error that counts. We should take chances, make mistakes. That's how we grow.

What is one quality entrepreneurs should have and what is your advice for struggling entrepreneurs?

For me, hiring the right people is vital and critical. Being surrounded by people who are both honourable, good to their word and smart is rare. At Mamo, we have a wonderful team that shows up when it counts. Hire well, spend time on it and make sure not to take shortcuts, especially when you are moving fast, which is the case with start-ups.

Company profile

Company name: Mamo

Started: June 2019

Founder: Imad Gharazeddine and Asim Janjua

Based: Dubai, UAE

Industry: FinTech

Funding size: $9.5m

Investors: Pre-Series A investors include Global Ventures, GFC, 4DX Ventures, AlRajhi Partners, Olive Tree Capital, and a few Silicon Valley investors

Updated: October 31, 2022, 6:17 AM