Generation Start-up: New app empowers youth to take control of their financial futures

When Alexandre Soued and Helal Lootah left the UAE to study for their degrees abroad eight years ago, little did they know how central a role financial literacy would play in their lives. The high-school friends, who met at Dubai English Speaking College in 2011, admit they found it initially difficult to manage their money at university. Mr Soued, who was attending the University of Virginia in the US, turned to budgeting apps, such as Mint, to stay on top of his budget. Mr Lootah, who was studying law at the University of Exeter in the UK, relied on a simpler way to manage his money, by tallying up receipts. “We both found that managing our finances was extremely difficult and that saving was even more difficult,” Mr Soued says. “There were tools available in [the UK and the US] that would help you manage your finances in an easier way.” Mr Soued and Mr Lootah are not alone. According to a 2019 financial literacy survey by Visa, 43 per cent of respondents in the UAE aged between 16 and 24 said they were not ready to manage their own money, while 53 per cent said schools did not prepare them to take care of their finances. “They don’t teach us financial skills in school,” Mr Lootah says. “They don’t teach us what a credit card does or how to manage our finances. When people graduate ... they don't have the tools or knowledge to be able to manage their finances in a correct manner.” As a former case manager in the Dubai Courts, Mr Lootah witnessed first-hand the negative repercussions that a lack of financial literacy can have on young people’s lives. “The lack of financial literacy can literally ruin people’s lives because they don’t plan properly,” says Mr Lootah, who is a New York state bar-qualified attorney and a counsellor at law. When they returned to the UAE after getting their degrees, Mr Soued and Mr Lootah realised there was nothing on the market to help them continue managing their finances and last year quit their jobs to co-found Lune, a personal finance assistance app. The mobile app, which was launched on the Apple store and Google Pay at the beginning of July, sets out to simplify money management and increase financial literacy among youth in the Middle East and North Africa region. Mr Soued and Mr Lootah bootstrapped the company themselves, investing more than $200,000 of their savings to get it up and running. Licensed as a software technology company, Lune is registered in the Dubai International Financial Centre. The interactive app allows users to link several bank accounts and credit cards through one platform to track spending, as well as set budgets and saving goals. Lune gets read-only access to users’ data and does not have access to bank account details or store them. It also uses industry standards to encrypt and safeguard user information through bank grade 256-bit TLS 1.2 technology, which links bank accounts to the app. Financial literacy is a priority for the UAE government, which has presented a number of programmes over the past three years to tackle the rise of personal debt in the country. In 2019, the Central Bank of the UAE signed an agreement with Emirates Foundation to launch a financial literacy programme through the Esref Sah scheme. Meanwhile, the UAE Banks Federation launched a financial literacy handbook in May 2018 to help consumers manage their money more effectively. Last November, the Authority of Social Contribution – Ma’an announced a new financial literacy programme to educate Emiratis about smart money management and contribute to Abu Dhabi’s long-term economic growth. “Although there are a lot of initiatives, the traditional approach of sitting people down and giving them a lecture about budgeting is not really very fun,” Mr Lootah says. “We tried to make the app as simple as possible,” Mr Soued, a former senior consultant with Booz Allen Hamilton, says. “We tried a lot of the solutions in the market and we realised that it really needed to be a few clicks because in the FinTech space, it’s already a bit daunting and people don’t really like opening that Pandora’s Box.” The Lune app is currently free to download, but Mr Soued and Mr Lootah plan to move it to a subscription-based model and tie up with partners to introduce premium features to reward loyal users. They will also be launching the app in Arabic. “We’re planning on adding more premium features or more advanced features based on customers’ requests, that will be the first source of revenue. The subscription model is secondary for partnerships with other institutions,” they say. In just a few weeks, the Lune app has been downloaded more than 700 times. They hope the increased focus on personal finances and financial literacy during the Covid-19 pandemic will continue to boost momentum. “One of the very interesting things that we noticed, especially after Covid-19, is the huge shift into financial awareness on a personal and societal level, whether it’s Emirati or non-Emirati – this is very good,” Mr Lootah says. In the short term, they plan to expand into Saudi Arabia, the Arab world’s largest economy, and the rest of the Mena region. Lune is different from other players in the budgeting app space because it takes users through a holistic three-step value chain that helps them to manage, save and invest their money, as well as educate them in financial literacy, the co-founders say. “One of the things that we’ve noticed is there’s nothing like us globally … and we have global ambitions,” Mr Soued says. “We do think that if we are able to crack this code and really attract that whole value chain, we could be a global player in the space.” Mr Soued: I really like PayPal and TransferWise (now known as Wise). I spent a year and a half in FinTech and looked at all these, especially in the remittance space. TransferWise is an amazing company and I like how they really simplified something. I think the remittance market is one of those markets where there will be a lot more innovation. Mr Lootah: Lune is one of the most rewarding experiences of my life so far, even though we’re still starting and in the very early stages. It’s a very challenging stage. I’m not going to sugarcoat this but I think I learnt more in this past year than my whole career. You get exposed to a wide range of challenges on a personal level and on a skills level. Mr Soued: From a skills point of view, I think it is realising that not everything is in your control. There is also diplomacy and working with different people. Some people work a certain way and you just need to deal with it. It’s a trade-off that you just need to accept and move on from. Mr Soued: I think in five years, we want to own that whole value chain that I described. And we want to be across the region, at least in the GCC if not the Mena region. Mr Soued: I think we made a rookie mistake, which is that we didn’t spend enough time, at least at first, with our first idea, validating what our users wanted. We went in head first. Mr Lootah: Yes, we went in head first but if we hadn't done that, I don't think we would have started. You see a lot of analysis from Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, about the digital economy and the initiatives such as 1 million Arab Coders and the National Programme for Coders. There's an understanding that the future of the economy is going to be digital and I want to inspire young people here, whether Emirati or non-Emirati students, to follow this field. Company profile Company name: Lune Started: June 2020 Founders: Alexandre Soued (co-chief executive) and Helal Tariq Lootah (co-chief executive) Based: Dubai Sector: FinTech Size: Eight team members Stage: Pre-seed Investors: Bootstrapped with more than $200,000