Financial literacy start-up Yabi raises $8m in seed funding round

Ambareen Musa, founder and chief executive of Yabi by Souqalmal, says the company and Saudi Vision 2030 both aim to improve financial literacy and saving levels. Pawan Singh / The National

Financial literacy start-up Yabi by Souqalmal, backed by Dubai-based investment bank Shuaa Capital, has closed its $8 million seed round after expanding its services in Saudi Arabia.

Investment firm Al Wafra Al Thanya (Wafra II) joined existing investors in the seed funding round, Yabi said on Tuesday.

Shuaa Capital contributed $6 million to the round and Wafra II invested $2 million, it added.

The proceeds will be used for product development and to push growth into regional markets.

Yabi introduced its financial literacy initiative in Saudi Arabia in November.

“Yabi and the Saudi Vision 2030 share a common goal – to increase financial literacy and saving levels across the kingdom,” said Ambareen Musa, chief executive of Yabi.

“Financial literacy and the involvement of individuals in the economy are top priorities for the public and private sectors. About 30 per cent of Saudis are considered financially literate today [according to a Sama report] and the savings ratio was 1.6 per cent of annual disposable income [in 2018]. Those are evidence of some of the gaps we want to fill.

“The Saudi Vision 2030 has within its targets to increase the national saving levels closer to the global average of 10 per cent.”

The Covid-19 pandemic raised widespread concerns over personal financial issues, as millions of people around the world were either furloughed, lost their jobs or had their salaries cut, highlighting the importance of saving, having an emergency fund for short-term cash needs and enough money for retirement.

Retirement savings are the biggest financial challenge faced by employees in Gulf countries, followed by child care and education expenses, and saving for other commitments such as housing, day-to-day costs and emergencies, according to a survey published by global advisory company Willis Towers Watson in January.

More than 50 per cent of 4,000 Yabi subscribers in the UAE polled recently by the company said they spent everything they earned, while 36 per cent admitted to spending more than they earned.

Fifty-one per cent of respondents said they could afford expenses for about three months without a job, while 43 per cent were not confident at all of meeting their long-term financial goals, the survey found.

The results also showed that 60 per cent of workers were stressed about finances, while 73 per cent said they would switch to an employer that prioritises their financial well-being.

Launched in the UAE in June this year, Yabi by Souqalmal is an app that offers structured personal finance masterclasses to employees of companies that have signed up for the service.

The masterclasses cover topics including budgeting, asset allocation, investing in cryptocurrencies, how to buy a home, calculating retirement income and how to invest.

UAE companies that have signed up for Yabi by Souqalmal include Dubai-based super app Careem, Majid Al Futtaim, one of Dubai’s biggest private sector companies and the Middle East’s largest mall operator, Emirates Catering Services, luxury retail group Chalhoub and Al Ghurair.

Yabi launched in English and Arabic in Saudi Arabia and will offer two new courses every month.

It has created a localised personal finance well-being platform for the kingdom, the company said.

Financial education is a localised issue as each country has its own financial system, credit score system and financial ecosystem, Ms Musa said.

The objective is to increase financial literacy by encouraging companies to incorporate financial literacy as part of their employee well-being programme, it added.

“Wafra II’s investment in Yabi to bring its platform to the Saudi market aligns with its core purpose to play a role in raising the level of financial education, build up investments and savings and, therefore, contribute to Saudi Arabia’s digital GDP [gross domestic product],” said Salah Khashoggi, president of Al Wafra Al Thanya.