Now Money, a fintech start-up servicing the UAE's low-income migrant population, has secured US$700,000 of seed-funding from two US-based venture capital investors.
The Dubai-based payment services provider, which uses banking technology to provide accounts and remittance options for those that do not have access to traditional bank accounts, gained the investment from Accion Venture Lab and Newid Capital. Both funds make investments that target the financially underserved.
Now Money was founded in September 2015, and has since grown its user base to over 4,000.
"We're incredibly pleased to have secured funding from the US," said Katharine Budd, the company's co-founder.
"Financial exclusion is a global problem, and we can't wait to work alongside Accion Venture Lab and Newid Capital, who work tirelessly to eradicate the issue."
According to Ian Dillon, the cofounder of Now Money, it is the first early stage investment from US venture capital firms into the Middle East.
"We hope this will be the first of many US venture capital investments in the region, and will help to grow the ecosystem further," said Mr Dillon. The main reason for the lack of US investmentis the difficulty in understanding a different market, he added.
"We've spent almost two years building relationships with the investors and showing them what we're doing ... We've got to know each other really well and have built up trust in the industry and region," he said.
This latest investment comes a year after Now Money secured its initial seed funding of $500,000 from a private investor, which financed the team's expansion and the development of the brand and its technology. The company was launched by Mr Dillon and Ms Budd with $200,000 of their own money.
Mr Dillon said the company plans to use the latest round of funding to expand its offering across the UAE and wider GCC.
Michael Schlein, the chief executive and president of Accion, whose Venture Lab invests and supports innovative start-ups that increase access to financial services to those traditionally excluded, said: "Each year, migrant workers contribute more than $400 billion to their home economies, and the UAE is among the top remittance-sending countries in the world. Now Money's innovative approach and digital platform provide a faster and safer option for these workers to support their families and communities."
Amee Parbhoo, director of investments at Accion Venture Lab, said the investment is the company's first into the Middle East region and its first into "a wholly digital neobank".
Now Money's funding announcement comes alongside initiatives in Dubai and Abu Dhabi to develop fintech ecosystems as a means of attracting start-ups in the space. On Monday the Dubai International Financial Centre (DIFC) started its inaugural accelerator programme with 11 fintech start-ups from around the world, including two from the UAE. The programme, developed in partnership with Accenture, was officially launched earlier this year.
According to Accenture, the global fintech sector has attracted more than $50bn in investment since 2010, while the Middle East and North Africa region has received around 1 per cent of this number – a figure the DIFC accelerator hopes to increase.
Abu Dhabi Global Market meanwhile last year launched its RegLab programme, providing a "sandbox" environment enabling fintech start-ups to develop business ideas under a light regulatory touch, with advice from financial institutions and others. The programme selected its first five participants in May.
The number of fintech ecosystems in the Middle East and North Africa rose to 105 in 2015 from just 46 in 2013, according to research from Payfort and Wamda published in March.