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Most of Egyptian populations do not have access to traditional banking activities, and many are forcing them to rely on cash transactions and informal lending. Khazna, a fintech starting company in 2019, is a matter of offering tailored financial services for low and medium-income workers. The company offers solutions such as salaries progress, digital payments, and microplars to help employees and entrepreneurs to achieve very necessary financial services.
Khazna recently raised $ 16 million in pre -series B funding and made full funding at more than $ 63 million. The investment will support its expansion plans as it is prepared to apply for digital banking in Egypt and expand it to Saudi Arabia.
When we covered the fintech in 2022, he raised just $ 38 million before the pre-series series with more than 150,000 customers. Nowadays, Khazna has increased its user base to more than 500,000 people; This number was half, which was targeted twice by the end of 2022, according to the then Saleh sharing.
The company focuses on earn three times less than Egypt’s minimum wage, providing them with affordable financial instruments. About 100,000 users receive payrolls via Khazna, allowing the company to integrate directly to their loans and insurance into their payroll account.
Khazna offers lending services to the remaining 400,000 users, helping employees and pensioners access to the loan. CEO Omar Saleh explained that the company initially focused on wage-backed credit and pension lending, contributing last month.
“What we have done in the last two and a half years was to focus on our basic product, which offers a credibility offer for payroll and retirement discounts, as well as not covered by employees,” said Omar Saleh’s co-founder and CEO on the techcrunch call . “This is the most profitable and basic product in our journey, and getting the right thing was very important because it helped us achieve profitability.”
By becoming a digital banking
Khazna provides other services such as invoice payment, purchase now, pay later, medical insurance and a rental fee. But by embedded in both payroll and lending, it is strategically moving strategically into a complete digital bank of Egypt’s underperformed communities.
But one thing is missing: unlike traditional banks, Khazna, like Egyptian fintechs, does not have access to customer deposits, so it is expensive to finance loans. So far, Khazna has relied on wholesale debt financing in dollars (USD) and the Egyptian Font (EGP) to finance her lending operations.
In order to reduce borrowing costs and to provide cheaper loans, Khazna is now working on obtaining a deposit permit in Egypt. This license would allow you to start your customer deposits, allowing you to reduce the cost of the funds.
“The biggest change of game here is to get access to user deposits. There is a huge opportunity for us to seize part of the market in such a way that our financing costs make it much more attractive than it is today, and in the end it puts us in a very distinctive position, ”he said.
In mid-20126, KHAZNA aims to provide the Egyptian central bank’s banking license, which in July 2024 determined the regulatory framework for digital banks.
However, as the six-year-old fintech begins this process, it simultaneously sets out attractions in Saudi Arabia, where demand for consumer financial solutions is increasing. Unlike BNPL players, such as Tabby and Tamara, which focus on short-term BNPL credit, Khazna hopes to distinguish them Pension-based loan.
Extension plans including a non-Imblinit IPO
Another reason for Khazna’s Saudi priority is that his close relationship with Egypt is noted by Saleh. In Saudi, with nearly three million Egyptians, the Egyptian-Saudi transfer corridor is one of the largest in the world, providing opportunities for cross-border financial services, combining credit-controlled offers in combination with currency (FX) solutions.
According to Saleh, besides market size and product fit, Saudi -Arabia capital markets also lead to Khazna’s decision. Tadawul is one of the lowest and retail investors in the region, which has launched more IPOs over the past few years.
Therefore, Khazna plans to arrive 40-50% of Saudi in the next four years, so he is entitled to Tadawul’s public list. For early investors who supported the company for four to five years, Saleh says this provides a clear way to the high-value exit.
Of course, Khazna finances this enlargement with recently raised growth capital. However, the Egyptian macroeconomic challenges over the past two years have built this series in their hands B round.
Between 2022 and 2023, Egypt’s devaluation and economic instability were faced, which made fundraising difficult for start -ups and businesses. The general slowdown of Deal Flow reflects this as investors have used a cautious approach to Egyptian start -ups. But 2024, however, has made a significant change: more than $ 50 billion in foreign foreign investment (FDI) has flowed into Egypt after economic reforms and more flexible exchange rates. As a result, investor confidence has returned and has aroused a renewed interest from global and regional investors.
As such, Khazna welcomed the participation of new and existing investors, including global investors such as Quona and Speedinvest, as well as regional financial institutions and investment companies such as Sanad Fund for MSME, ANB Seed Fund (A Anb Capital Treatment), Aljazira Capital (investment investment investment (investment investment) Saudi -Arabia Bank’s Aljazira Faculty), Tibas Ventures (Turk created by fintech base) and the ICU Ventures.
