Lucky, a fintech startup based in the Middle East, just secured a $25 million Series A round of fundraising, the largest ever for an Egyptian company.
Interestingly, this funding was led by Egypt’s major banks namely Banque Misr, National Bank of Egypt and Banque du Caire, along with Nclude which is backed by MEA’s prominent venture capital firm known as Global Ventures.
It was founded in 2018 by Momtaz Moussa and Ayman Essawy with the goal of revolutionising the way Egyptians buy, spend, and save. The app offers cashback rewards, discounts, credit products, and other benefits that can be used individually or online at vast numbers of local and international retail outlets.
PayU, a Dutch fintech firm, along with VentureSouq, Otf, Endeavor Catalyst, DisruptechVentures, and Arzan Capital, joined Lucky’s previous lender and significant investor Lorax Capital Partners in the investment round.
The firm claims to have 8 million monthly active users and Egypt’s largest merchant network, providing consumers with financial independence and purchasing power and tackling a unique need for the “unbanked” individuals. The company has witnessed a 250 per cent rise in gross merchandise value year over year, as well as a surge of positive feedback, earning it an Apple app store award for Egypt’s best apps. In addition, Lucky has expanded to Morocco, with plans to extend to other MENA markets that rely on finances, in order to compensate for the 67 per cent of Egyptians who are financially disadvantaged.
Egypt’s FinTech Ecosystem and Its Rapid Growth
Fintech is indisputably at the core of Egypt’s economy, with capital inflows skyrocketing in the last five years. About $900,000 was committed to Egyptian fintech companies in 2017. In 2018, the sum grew by a factor of ten to $27.8 million, before falling to $25 million in 2019. Fintech investment opportunities reached $37 million in 2020 while increasing to $159 million in 2021.
The number of agreements and the average ticket amount have increased over time, with three deals totalling a sum of $300,000 occurring in 2017. In the year 2021, there were 32 agreements at a total of $5 million.
The above figures have placed the Egyptian fintech industry in the spotlight with Global Ventures, a corporation that has mostly been sector-agnostic in its efforts to integrate Middle Eastern and North African entrepreneurs with foreign financing. In an interview, Basil Moftah, General Partner at Global Ventures, enthusiastically praised the progress of Egypt’s fintech sector, signalling that the Nclude fund has wasted no time in allocating funds.
Responding to a question in the interview Mofta said “over the past few years, we have had the privilege of being part of the journey of many entrepreneurs across MEA, with a particular focus on the fintech sector and Egypt as a key priority market.” He further added, “Egypt’s huge unbanked, young population and cash-dominated economy offers strong opportunities for local and regional fintech and fintech-enabled companies who continue to witness exponential growth in the market.”
Moftah, as well as many others, believe that the Egyptian fintech sector will sign bigger agreements and attract additional funding by 2022. Shipyard Technology Ventures, a global venture builder, will engage with Nclude’s General Partner, Eslam Darwish, to find new developing and nascent firms that may solve local and regional fintech obstacles and prospects, recognizing that there are still more territories to be conquered.
Lucky Eyes Expansion and Further Growth
As per the official statement at the fund’s formal opening this week, the acquired fund has so far been allocated to three other Egyptian fintech firms: financial super-app Khazna, agri-fintech firm Mozare3, and digital payment service provider Paymob.
There are more than enough prospects for firms like Lucky, and for co-founders Moussa and Essawy, 2022 is shaping up to be a pivotal year in the wake of this unprecedented investment acquisition.
For now, the partners intend to focus their efforts on ‘building market leadership’ and enhancing the company’s present capabilities to keep up with customers’ increasing credit demands. Although it remains to be seen how this arrangement will play out, it does set a new standard for Egypt’s financial industry, which continues to develop in a proactive manner.
Last Updated on August 26, 2023 by Safiya K
