Egyptian FinTech start-up Flash has raised $6 million in a seed round that it will use to drive its expansion and contribute to the advancement of the country's financial inclusion strategy.
The funding round was led by New York-based venture capital firm Addition, with San Francisco's Flourish Ventures and other angel investors taking part, Cairo-based Flash said on Monday.
The FinTech, founded by former Uber Technologies regional executives Erik Gordon and Sherine Kabesh in 2021, provides cashless payment solutions through a scan-and-pay service, which it said would drive growth in Egypt's digital economy.
This “removes transactional challenges for businesses looking for an easier solution than the POS [point of sale] terminal … our goal is to make payments easier, safer and faster for everyone”, Mr Gordon said.
The funding “will enable us to invest in our product and business and customer acquisition, and utilise the valuable insights of our experienced investment partners to advance the economy of Egypt”, he said.
Flash has also received approval from the Central Bank of Egypt, in partnership with Banque Misr, to operate as a technical payment aggregator.
A technical payment aggregator is a third party that primarily provides technical services to merchants on behalf of the bank, such as providing e-payments services for paying bills or services.
Through Flash, businesses can accept payments directly from consumers without the need for POS systems or technical integration.
This will allow Flash to connect financial institutions with merchants, allowing for a more streamlined payment process with its services and applications.
Flash is working to align itself with the Egyptian central bank's financial inclusion strategy, which is part of the North African country's Vision 2030 economic and sustainable development programme.
The initiative aims to promote financial inclusion by expanding access to financial services for consumers that are difficult to reach, particularly in rural and remote areas, and developing financial literacy among consumers.
The central bank approval “strengthens our commitment to developing the cashless ecosystem, introducing new products and diversifying our digital payment portfolio”, Ms Kabesh said.
“It enables us to expand the scope of our digital financial products and reach millions of micro-entrepreneurs, driving growth and advancing Egypt's digital economy.”
The role of start-ups has grown over the past years as they drive digital adoption and growth, enabling consumers to gain access to services with convenience.
The Mena region, which has a sizeable population of tech-savvy users, has become an attractive market for global investors.
Egypt, the Arab world's most populous nation, has registered steady growth in its e-commerce industry.
The value of the sector is projected to hit $15.7 billion by 2028, from $7.9 billion in 2023, at a compound annual growth rate of about 15 per cent, Mordor Intelligence data shows.
co-founder of Flash
The country is also one of the region's top markets for start-up funding, ranked third behind Saudi Arabia and the UAE in terms of venture capital funding in the Mena region, according to data from start-up platform Magnitt.
The three countries collectively had the lion's share of VC funding in 2022, attracting investments worth $1.19 billion, $987 million and $517 million, respectively, which represents about three quarters of total activity, it showed.
On a broader scale, start-ups across the Middle East, Africa, Pakistan and Turkey raised $7.2 billion through 1,473 deals last year, despite macroeconomic and geopolitical uncertainty, Magnitt reported previously.
Funding for Mena start-ups alone crossed the $3 billion mark last year, an annual increase of 8.3 per cent, the research showed.
FinTech led both funding and number of deals in the Middle East, Africa, Pakistan and Turkey region, with the sector's funding hitting $2.25 billion across 351 deals in 2022, Magnitt said.
The strategy of Flash is expected to help in “transforming the payments landscape in Egypt, simplifying the complex transactional process for consumers and businesses with a safe and easy-to-use application”, said Andrew Miskiewicz, an investor at Addition.
