The start-up, which is part of Abu Dhabi’s global tech ecosystem Hub71, offers a prepaid card to teenagers and an app to manage and save money.
Investors who participated in the latest funding round included Goodwater Capital, Dubai Future District Fund, Rebel Fund, Trampoline VC, Zemu VC, some European family offices and strategic angel investors, Zywa said in a statement.
The new funds will help the company to focus on product, growth and strategic partnerships to accelerate its growth in the UAE and Egypt markets, and support the launch of its services in Saudi Arabia — the Arab world’s biggest economy — by early next year, said Alok Kumar, co-founder and chief executive of Zywa.
“Gen Zs in the UAE spend about Dh5 billion every year and still rely on cash or their parents’ cards, despite having options like supplementary cards issued by their parents’ banks," he said. "While these options give access to digital payments, they are not fundamentally designed for Gen Z and this is where we add value."
Founded in 2021, Zywa offers a gamified community-based banking app and payment card to Gen Z youngsters aged 11 to 25. Through the app, parents can send money to their children and oversee their spending and saving habits.
In the Middle East, the FinTech sector is undergoing rapid expansion. By 2022, more than 800 FinTech companies operating in various segments such as payments, InsureTech and cyber security, are projected to raise more than $2bn in venture capital funding to boost their growth, UAE lender Mashreq said in February, citing data from the Middle East Institute.
Globally, digital payments are expected to grow to $8.26 trillion by 2024, from $4.4tn in 2020, Statista said.
Zywa in February raised $1m in a pre-seed round that was led by Y Combinator. It recently joined Hub71, gaining access to Abu Dhabi’s capital ecosystem, a global network of partners and a community of highly skilled talent.
“With Gen Z, we need to hit the nail on the sweet spot between community, gamified learning and payment access,” said Nuha Hashem, co-founder and chief technology officer of Zywa.
“We want them [Gen Z users] to experience banking in a cool way that sets a high standard for them in the future. This funding will also help us tailor the product to a new audience in my home country [Egypt] and the country where I grew up [Saudi Arabia]."
In only four months of the pre-seed round, Zywa received more than 100,000 sign-ups.
“We are excited to back Zywa as we believe financial education needs to be revolutionised for teens in this changing economy,” said Samantha Ku, chief operating officer of Square Financial Services, one of the strategic angel investors who joined the latest funding round.