Dubai-based investment bank Shuaa Capital, which has assets under management worth nearly $14 billion, has acquired a majority stake in UAE-based financial comparison website Souqalmal.
The value of the investment and size of the stake have not been disclosed.
Shuaa joins Souqalmal's existing shareholders Riyad Capital and UK comparison website GoCompare, the company said in a statement on Monday to the Dubai Financial Market, where its shares are traded..
The investment will provide growth capital to Souqalmal, which means "money market" in Arabic, and allow it to execute an ambitious growth plan over the next 24 months, Shuaa said.
“We believe that Souqalmal and its financial education arm have the ability to empower customers to understand, manage and grow their finances in a better way,” said Fawad Khan, managing director and head of investment banking at Shuaa Capital.
“As Souqalmal strengthens its personal and wealth management offering, Shuaa will be well-positioned to help the company access new pools of capital, products and, more importantly, knowledge.”
The UAE ranked first across the Middle East and North Africa last year in terms of the number of deals and funding, figures compiled by data platform Magnitt show. It found that Emirates-based start-ups raised $1.17 billion across 155 transactions in 2021.
The investment “supports Shuaa’s strategy to increase its digital offerings and enhance personal finance and investment opportunities for the consumer”, the company said.
Souqalmal is developing a personal financial management platform that will include financial education and awareness, the statement added.
Ambareen Musa, who founded Souqalmal in 2012, will continue as chief executive and oversee the expansion of its services.
“This acquisition gives Souqalmal what it needs to now bring the company to the next level,” Ms Musa said.
“The drive to digitalisation of financial services is where the two companies really clicked and this marriage brings resources, talent and the funds we need to take on the under-penetrated financial education industry.”
The Covid-19 pandemic has put employee financial issues in the spotlight and many companies are now trying to formulate plans to help workers bridge their savings gap.
A 2020 survey by Mercer found that 45 per cent of foreign employees in the UAE either had no means of maintaining a decent standard of living in their retirement, or plan to work beyond retirement age to derive enough income for their latter years.
A lack of financial awareness was also an issue among respondents, with 61 per cent saying they had no long-term savings.
Souqalmal launched a corporate financial education initiative for employees last year through its MoneyDoctor Programme, which helps consumers to educate themselves, get instant pre-approval on their credit products, track their spending and grow their wealth on a single platform, according to the statement.
UAE companies such as Majid Al Futtaim, Careem and Emirates Catering now offer the MoneyDoctor programme to their employees.
Earlier this month, Shuaa launched a $100 million initial public offering of the first of its three planned special purpose acquisition companies on the Nasdaq in New York.
The company listed 10 million units of Shuaa Partners Acquisition Corp I at a price of $10 per unit. The Spac started trading under the ticker symbol “SHUAU” on March 2, Shuaa said in a statement to the Dubai Financial Market, where its shares trade.
Meanwhile, Shuaa reported a 68 per cent drop in net profit last year after earnings were dragged down by one-off charges.
The company’s net profit slipped to Dh40m ($10.8m) due to one-off charges of Dh189m related to valuation impairments following the decision to accelerate the restructuring of a legacy, illiquid investment portfolio, it said.