A big a part of Egypt’s population does not have access to traditional banking, forcing many to rely on money transactions and informal loans. KhaznaFinTech Startup founded in 2019, solves this problem by offering financial services adapted to employees with low and medium income. The company provides solutions equivalent to advances, digital payments and microloans to help employees and contractors in access to the very mandatory financial services.
Khazna recently secured $ 16 million funding against series B, which supplies complete financing to over $ 63 million. The investment will support its expansion plans by preparing to apply for a digital banking license in Egypt and expand to Saudi Arabia.
When we discussed fintech in 2022, he just collected a series A in the amount of $ 38 million from over $ 150,000 in its products. Today, Khazna has increased its user base to over 500,000 people; This number is half, which he aimed at the end of 2022, according to what the co -founder and general director of Omar Saleh divided it.
The company focuses on employees earning three times lower than the minimum wage of Egypt, providing them with inexpensive financial tools. About 100,000 users receive pays via Khazny, enabling the company to integrate financial services equivalent to loans and insurance directly with pay accounts.
In the case of the remaining 400,000 users, Khazna offers loan services, helping employees and pensioners in access to the loan. Saleh explained that this product took a break of FinTech in last month.
“Over the past two and a half years, we have focused on our basic product, which is a credit offer for recipients of wages and pensions, as well as unsecured loans for concert employees,” said Saleh, said TechCrunch. “This is the most profitable and basic product in our journey, and improving it was very important because it helped us achieve profitability.”
On the road to becoming a digital bank
Khazna provides other services, equivalent to accounting payments, buy now, pay later, medical insurance and rent product. But by embedding each wages and borrowing, he is strategically heading towards the full -fledged digital bank for underestimated Egyptian communities.
But one thing is missing: unlike traditional banks, Khazna has no access to customer deposits, which makes him costly loans. Until now, Khazna was about financing wholesale debts in dollars (USD) and Egyptian pound (EGP) to finance credit.
To reduce loan costs and offer more cost-effective loans, Khazna is now working on obtaining a license for deposits in Egypt. This license would launch customer deposits, enabling reduction of funds.
“The biggest game changer is to gain access to user deposits. There is a huge opportunity to capture part of this market in a way that will cause our financing costs to be much more attractive than today, and eventually would put us in a very diverse position, “Saleh noted.
Khazna goals to secure the banking license from the Egyptian Central Bank, which in July 2024 developed its regulatory framework for regulatory banks.
When six -year -old fintech begins with this process, at the same time he sets monuments in Saudi Arabia, where there is a growing demand for consumer financial solutions. Unlike BNPL players, equivalent to Tabby and Tamara, who focus on the short -term BNPL loan, Khazna hopes that they are distinguished thanks to medium -term credit products, equivalent to gaining access to remuneration (Ewa), supporting loans with pay and a retirement loan.
Expansion plans, including not very intense IPO
Another reason why Khazna is the Saudis’s priority is his strong relationship with Egypt, notes Saleh. With almost three million Egyptians living in Saudi Arabia, Egypt-Saudi Corridor is one of the largest in the world, being the opportunity to offer cross-border financial services, combining LED-Credit offers with currency solutions (FX).
According to Saleh, in addition to the market size and product matching, Saudi Arabian capital markets are also the driver of the Khazny decision. Tadawul, the Stock Stock Exchange in Saudi Arabia, is one of the most liquid and based on retail stock exchanges in the region, introducing several IPO in the last few years.
For this reason, Khazna plans that 40-50% of her activity comes from Saudi in the next 4 years, which makes him qualifying for a public offer at Tadawul. In the case of investors at an early stage who supported the company from 4 to five years, Saleh claims that this is a clear path to a high value exit.
Sure, Khazna will finance the expansion with recently increased growth capital. However, macroeconomic challenges in Egypt over the past two years have had a hand in the structure of this round before the B series.
In the years 2022–2023, Egypt faced the devaluation of currency and economic instability, which hinders the acquisition of funds for startups and projects. The general slowdown in the transaction flow reflected this because investors adopted a cautious approach to Egyptian startups. But 2024 brought a significant change, and over $ 50 billion in direct foreign investment (FDI) was received by Egypt after economic reforms and a more flexible exchange rate. As a result, investors’ trust was returned by re -interest of worldwide and regional investors.
As such, Khazna was satisfied with the participation of latest and existing investors, including global investors equivalent to Quon and Speedinvest, in addition to regional investment firms equivalent to Aljazira Capital (ARM Investment of Bank Aljazira from Saudi Arabia), Anb Seed Fund (managed by Anb Capital), Disruptech, ICU Ventures, Khwarizmi Ventures and Sanad Fund for Msme.