A large part of the Egyptian population does not have access to traditional banks, forcing a lot to rely on cash transactions and informal loans. KhaznaA Fintech startup founded in 2019, addresses this issue by offering financial services adapted to low and average income workers. The company provides solutions such as salary advances, digital payments and microlaves to help employees and entrepreneurs access essential financial services.
Khazna recently obtained funding of $ 16 million in B before the series, relating to total funding to more than $ 63 million. The investment will support his expansion plans while he is preparing to ask for a digital banking license in Egypt and to develop in Saudi Arabia.
When we covered the fintech in 2022, had just raised $ 38 million Before series A with more than 150,000 customers in its products. Today, Khazna has increased its user base to more than 500,000 people; This number is half of what he was targeting twice at the end of 2022, according to what Saleh shared at the time.
The company focuses on workers earning three times less than the minimum wage of Egypt, offering them affordable financial tools. About 100,000 users receive their salary via Khazna, allowing the company to integrate financial services such as loans and insurance directly in their payroll accounts.
For the remaining 400,000 users, Khazna offers loan services, helping workers and retirees access the credit. CEO Omar Saleh explained that the company was initially focused on credit and pension loans supported by pay, contributing to its profitability threshold last month.
“What we have done in the past two and a half years was to focus on our basic product, which is a credit offer to pay and retirement beneficiaries and also unused loans to workers of the concert, “said co -founder and CEO Omar Saleh in Techcrunch during a call. “This is the most profitable and most basic product of our trip, and doing things correctly has been very important because it helped us achieve profitability.”
On the way to become a digital bank
Khazna provides other services such as invoice payments, buy now, pay later, medical insurance and a rent product. But part of both payroll and loans, it is strategically evolving towards a full -fledged digital bank for poorly served communities in Egypt.
But one thing is missing: unlike traditional banks, Khazna, like many fintechs in Egypt, does not have access to customer deposits, which makes loans expensive. Until now, Khazna has relied on the funding of the dollar debt (USD) and the Egyptian pound (EGP) to finance its loan operations.
To reduce loan costs and offer more affordable loans, Khazna is now working to obtain a license to deposit in Egypt. This license would allow the startup to accept customer deposits, which allows it to reduce its cost of funds.
“The biggest game changer here is for us to have access to user deposits. There is a huge opportunity for us to capture part of this market so that our funding cost makes our funding cost much more attractive than today, and ultimately, this would put us in a very differentiated position ” , he pointed out.
Khazna aims at mid-2010 to guarantee the banking license of the Egyptian central bank, which established its regulatory framework for digital banks in July 2024.
But while the six -year fintech begins with this process, it is simultaneously on Saudi Arabia, where there is an increasing demand for consumer financing solutions. Unlike BNPL players as Tiger And TamaraWho focuses on the short -term BNPL credit, Khazna hopes to differentiate himself with medium -term credit products such as wage wage access (EWA), loans supported by payroll and credit -based credit.
Extension plans, including a not so imminent stock market
Another reason why Khazna prioritizes Arabia is its strong connection with Egypt, notes Saleh. With nearly three million Egyptians living in Saudi, the Egyptian corridor for the transmission of Saudi is one of the largest, offering an opportunity to offer cross -border financial services, combining offers led by credit with solutions of Change (FX).
Beyond the size of the market and the adjustment of the products, the capital markets of Saudi Arabia are also an engine of Khazna’s decision, according to Saleh. Tadawul is one of the most liquid and most retailing scholarships in the region, launching several IPOs over the past two years.
For this reason, Khazna plans to have 40 to 50% of its activities from Saudi Arabia over the next four years, which makes it eligible for a public list on Tadawul. For investors at the start of the stadium that supported the company for four to five years, Saleh says that this provides a clear route to a high -value exit.
Of course, Khazna will finance this expansion with the recently increased growth capital. However, the macroeconomic challenges in Egypt in the past two years have contributed to the structuring of this T round before the series.
Between 2022 and 2023, Egypt was faced with devaluation of money and economic instability, making fundraising more difficult for startups and businesses. The overall slowdown in the flow of transactions reflected, as investors adopted a cautious approach to Egyptian startups. But 2024 has brought a major change, with more than $ 50 billion in foreign direct investment (IED) flowing in Egypt following economic reforms and a more flexible exchange rate. Consequently, investors’ confidence has returned, arousing a renewed interest in 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 like Sanad Fund for Msme, Anb Seed Fund (managed By Anb Capital), Aljazira Capital (The Investment Weapons of Banking Aljazira of Arabia Saudi), Tibas Ventures (the venture capital branch of I ̇şbank of Turkey), Khwarizmi Ventures, Nculd (the Fintech Fund created by the most Large Egyptian national banks) and intensive care companies.
