UAE fintech Wafeq secures $3m to double its Saudi presence and expand into Egypt

UAE fintech Wafeq secures $3m to double its Saudi presence and expand into Egypt

CAIRO: Wafeq, a UAE-based financial software company for small and medium enterprises, raised $3 million in a seed funding round led by Raed Ventures with participation from Wamda Capital to double its Saudi presence and expand into Egypt.

Launched in 2019, Wafeq is a fintech start-up that provides easy-to-use software to strengthen the accounting and financial operations of SMEs.

In an exclusive interview with Arab News, Nadim Alamddine, Founder and CEO of Wafeq, said Saudi Arabia is the biggest and most important market for the company.

“Thus, we will double our growth here to continue to offer our solutions to SMEs in the Kingdom. We already have some of the most successful SMEs and startups among our clients, and as we grow here, we will continue to help businesses comply with accounting regulations,” he said.

Empowerment of SMEs

Designed for the financial and accounting needs of SMBs in the region, Wafeq’s software is trusted by more than 5,000 business owners and professional accountants who process more than $117 million in monthly invoices.

“Our platform is used by leading startups and SMEs across a wide range of industries including outsourcing, food and beverage, e-commerce, retail, and more,” explained Alameddine.

SMEs make up over 98% of all businesses in Saudi Arabia, 90% in Egypt and 94% in the United Arab Emirates, providing Wafeq with a large market to fuel its operations.

Additionally, the digitization of accounting practices in all three markets is experiencing significant changes with the introduction of mandatory electronic invoicing and digital reporting.

“Saudi Arabia has one of the most transparent and business-friendly accounting practices in the region, implemented by the Zakat, Tax and Customs Authority, also known as ZATCA,” said Alameddine.

In December 2021, ZATCA announced that all taxpayers will be required to issue electronic invoices with a compatible government system and divided the implementation into two phases.

In the first phase, taxpayers had to issue electronic invoices and familiarize themselves with the implementation of the new system. In the second phase, which is expected to be implemented in July 2023, taxpayers with taxable income exceeding SR 500 million will be required to integrate their e-invoicing systems with the government FATOORAH platform.

“SMEs still follow manual processes or use legacy software that is not compatible with local accounting requirements. Our strategy in Saudi Arabia will be to build more localized functionality, ensure the successful implementation of ZATCA Phase 2, and bring our e-Invoicing API solutions to more businesses here,” he added.

Wafeq initially focused on startups and acquired clients in leading companies such as UAE fintech Tabby, Saudi fintech Lean Technologies, Dubai fintech DAPI, UAE mobility tech Fenix ​​and the Saudi fintech PiFlow among many others.

Egyptian Opportunities

The company plans to use its funding to expand its current presence in Saudi Arabia and the United Arab Emirates, as well as fuel its entry into Egypt.

Alameddine explained that since Egypt has the highest percentage of SMEs, companies have very limited access to technological solutions that can support their operations.

“From a policy perspective, Egypt is introducing requirements such as e-invoicing and soon e-receipts for businesses and this is where Wafeq will have a positive impact. By entering Egypt, we will not only seek to acquire new customers, but also create jobs locally,” he added.

Wafeq’s standalone e-Invoicing API will play a huge role in its expansion into Egypt, enabling startups and enterprises to set up reliable third-party e-Invoicing while remaining regulatory compliant.

“With the backing of Raed Ventures and Wamda Capital, we are excited about our entry into Egypt while strengthening our presence in Saudi Arabia and the United Arab Emirates,” Alameddine said.

Talal Alasmari, founding partner of Raed Ventures, said Wafeq solves a problem that affects thousands of businesses in the region.

“Digitizing accounting practices will truly transform how SMEs operate here, increasing operational transparency, creating efficiencies and contributing to economic growth,” Alasmari added.

The company operates a software-as-a-service business model that complements its strategy of making its software easy and affordable for businesses to use.

“Signing up for Wafeq is free and customers starting a business can choose to use our basic plan. For customers with more complex needs, we offer a range of pricing options to suit their needs, billing volume and other factors,” explained Alameddine.

Raed Ventures is a venture capital firm founded in 2015 in Dammam, Saudi Arabia that focuses on early stage startups and has invested in notable companies such as SWVL, Tabby, and Trella.

Founded in the United Arab Emirates in 2014, Wamda Capital is one of the region’s leading venture capital firms with a portfolio of investments in over 70 companies, including Careem and Nana.