Khazna, a fintech company based in Egypt, recently raised $16 million in pre-Series B funding. This brings the startup’s total investment to over $63 million. The company aims to secure a digital banking license in Egypt while expanding into Saudi Arabia. Khazna focuses on providing affordable financial services to underserved workers in Egypt, including salary advances, microloans, and digital payments. With over 500,000 users, the company plans to offer payroll-backed credit, pension lending, and more. The funds raised will also help Khazna improve its financial services and prepare for a future IPO.
An Overview to Khazana
Fintech Khazna is transforming Egypt’s financial landscape with its innovative services. The company has raised $16 million in pre-Series B funding. Khazna aims to provide financial inclusion to Egypt’s underserved population. Founded in 2019, it targets low- and middle-income workers with limited access to traditional banking. By offering digital payment solutions, salary advances, and microloans, Khazna helps bridge the gap in Egypt’s financial system.
Working Model of Khazna
Khazna has crafted a unique working model focusing on digital financial services for low-income individuals. The fintech operates by offering a range of financial services designed for people with limited access to banking. Khazna’s main offerings include salary advances, digital payments, and microloans, all aimed at workers who earn below Egypt’s minimum wage. These solutions are integrated into payroll systems to ensure easy accessibility for workers. The platform offers a range of credit products, including unsecured loans for gig workers and pensioners.
Revenue Model
Khazna’s revenue model is built around credit services and financial products for underserved communities. The company earns primarily by offering payroll-backed lending and unsecured loans to gig workers. Its revenue comes from interest and fees on these loans, which cater to individuals without access to traditional bank credit. Khazna’s business strategy emphasizes creating long-term relationships with customers. It also provides financial services like bill payments, buy-now-pay-later (BNPL), and insurance, adding to its income streams.
Funding Background
Khazna has raised over $63 million in total funding since its inception. This includes a $38 million Series A round and the recent $16 million pre-Series B funding. Investors include Quona Capital, Speedinvest, Aljazira Capital, and ICU Ventures. The funding aims to help Khazna accelerate its digital banking ambitions and geographical expansion. The company intends to use these funds to scale its operations and secure a digital banking license in Egypt.
Founders and Their Background
Khazna was co-founded by Omar Saleh, an entrepreneur passionate about financial inclusion. Saleh, with a background in technology and finance, founded the fintech startup in 2019. His goal was to tackle the issue of financial exclusion in Egypt and across the MENA region. Before founding Khazna, Saleh gained experience working in global fintech companies. His leadership has been critical in driving Khazna’s growth and securing its position in the competitive fintech space.
Services and Products Offered
Khazna offers a range of services tailored to Egypt’s underserved workers. The platform provides salary advances, digital payments, and microloans. It also offers bill payments, buy-now-pay-later (BNPL), and medical insurance. Khazna’s financial products are designed to make everyday financial transactions easier for workers, including pensioners and gig economy employees. It has successfully integrated these services into payroll systems, enabling employees to access loans directly from their salaries.
Expansion Plans
Khazna plans to expand its operations into Saudi Arabia, capitalizing on the strong remittance corridor. The expansion is driven by the significant number of Egyptians living in Saudi Arabia. Khazna sees this as an opportunity to provide cross-border financial services. Additionally, Saudi Arabia’s growing demand for consumer finance products aligns with Khazna’s business model. The company aims to generate up to 50% of its revenue from Saudi Arabia in the next four years. The expansion will help the fintech diversify its revenue base and grow its market presence in the region.
Digital Banking License in Egypt
Khazna’s long-term goal is to become a fully licensed digital bank in Egypt. To achieve this, the company is working towards securing a deposit-taking license from Egypt’s Central Bank. Obtaining this license would allow Khazna to accept customer deposits and offer even more affordable loans. By reducing borrowing costs through access to deposits, Khazna will be able to scale its operations and improve its product offerings. The company aims to achieve this milestone by mid-2026, further solidifying its position in the digital banking ecosystem.
The Role of Recent Funding
The $16 million pre-Series B funding will support Khazna’s expansion and digital banking ambitions. This investment will be crucial in helping the company scale its operations. It will allow Khazna to continue offering financial solutions to Egypt’s low-income population while exploring opportunities in Saudi Arabia. The funding will also help Khazna work towards securing its digital banking license. The company is focused on utilizing this capital to increase its customer base and improve its financial products.
Challenges and Opportunities
Khazna faces several challenges, including currency volatility and regulatory hurdles in Egypt. The economic instability in Egypt between 2022 and 2023 made fundraising more difficult. However, with improved investor confidence in 2024, the company is now poised for growth. Khazna has overcome the challenge of not being able to accept deposits by working towards obtaining a digital banking license. This strategic move will lower its cost of funds and give it a competitive edge in Egypt’s fintech space.
Looking Forward
Khazna is well-positioned to lead the fintech revolution in Egypt and the MENA region. With over 500,000 users, the company has made significant progress in a short amount of time. Its commitment to financial inclusion and customer-centric approach has been key to its success. The company’s long-term plans include expanding its services to other markets in the MENA region. As it grows, Khazna aims to set new standards for digital financial services in the region.
Learning for Startups and Entrepreneurs
Focusing on underserved markets allows for sustainable growth and differentiation, while leveraging financial products that integrate with existing payroll systems can drive deeper engagement. It’s crucial to adapt the business model to evolving regulations and economic conditions to stay agile. Seeking investment is key to fueling expansion, but entrepreneurs must remain mindful of the challenges that come with it. Building a strategy for long-term sustainability involves diversifying revenue sources to reduce reliance on any single stream, ensuring a more resilient and scalable business model.
Future requirements of Khazna
Khazna’s progress offers a blueprint for fintech startups aiming to address financial exclusion. The company has made great strides in offering digital services to Egypt’s underserved population. With a clear vision of becoming a digital bank and expanding into Saudi Arabia, Khazna is poised for further success. By integrating payroll services and providing affordable loans, the fintech is changing how workers access financial products in Egypt. The recent $16 million in funding marks an important milestone in Khazna’s journey toward becoming a major player in MENA’s fintech space.
The Startups News
When it comes to providing comprehensive news and insights about emerging fintech players, The Startups News offers detailed reports on market shifts, new investment opportunities, and in-depth analyses of fintech industry trends. If you are looking to stay updated on fintech innovations, Khazna is one of the companies you should keep an eye on. From funding rounds to product expansions, The Startups News covers everything you need to know about fintech startups and the larger ecosystem.
