UAE FinTech start-up Alaan raises $2.5m

The spend management platform says it will use new funds to increase its headcount and scale in multiple markets across the Middle East

Parthi Duraisamy, left, and Karun Kurien, co-founders of FinTech start-up Alaan. Photo: Alaan

Dubai-based FinTech start-up Alaan raised $2.5 million in a new investment round as the company announced it is coming out of the stealth mode.

The multi-currency spend management platform said it would use the funds to increase its headcount and scale in several markets across the Middle East.

The new investment round is led by California-based investment fund Presight Capital and Berlin-based venture capital firms 468 Capital and Global Founders Capital.

Several angel investors also participated in the funding round. These include Mato Peric, Erik Podzuweit and Florian Prucker, founders of Scalable Capital, as well as Philippe Teixeira da Mota, founder of Hedosophia.

Alaan, which was founded last year, aims to manage all company expenditure through corporate cards and automated invoice payments.

“Our vision is to offer SMEs [small and medium enterprises] and entrepreneurs an innovative platform to manage company spend, be it through card rails or account-to-account rails,” Parthi Duraisamy, chief executive and co- founder of Alaan, said.

“In markets such as the UAE, over 80 per cent of consumer payments are digital. But when it comes to business payments, we haven’t seen substantial transformation and the old world of offline payments still rules. This is where Alaan comes in,” he said.

Alaan platform provides employees with corporate cards to make company purchases and automatically reconciles spending in real-time.

It instantly issues virtual cards in global currencies including the UAE dirham, Saudi riyals and the US dollar, for e-commerce transactions, subscriptions, vendor payments and in-store purchases. The platform also intends to eliminate expense reports and automates book-keeping tasks through integration with various accounting solution providers.

Start-ups in the Middle East and North Africa region registered record venture capital funding worth $2.6 billion last year through 590 transactions, according to a report by data platform Magnitt. About 35 start-ups announced exits in 2021, indicating a maturity in the region’s start-up landscape.

“Every company in the region uses different tools for payments, with finance teams spending hours working on manual tasks. Although more than 97 per cent of all business entities in the Middle East are SMEs, they are largely underserved by traditional financial institutions,” Ludwig Ensthaler, general partner at 468 Capital, said.

“We were impressed by [Alaan’s] vision to help SMEs in the region digitise their payment flow using an exceptional platform that we believe is set to revolutionise spend management.”

Alaan has partnered with issuers in several countries across the region to be able to issue corporate cards.

While in the stealth mode for over the past six months, the company built the product and finalised partnerships with regulated financial institutions to enable product launch, it said, adding it will soon announce the product launch in the market.

“We founded Alaan after experiencing first-hand the frustrating expense and invoice management processes. We have solved critical pain points in the end-to-end payment flow by building a software layer on top of the regulated banking infrastructure,” Karun Kurien, co-founder and head of product and technology at Alaan, said.