Egyptian fintech Paymob raises $50M led by PayPal Ventures and Kora Capital

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Egyptian fintech paymobwhich allows merchants to accept digital payments online and in store, announced today that it has raised $50 million in Series B funding.

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PayPal Ventures, PayPal’s global corporate venture arm, New York-based venture capital Kora Capital and London-based Clay Point led the round.

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New investor participants include Helios Digital Ventures, British International Investment (formerly CDC Group) and Nclude, a venture capital fund set up by Global Ventures and three Egyptian banks. Existing investors from $18.5 million Series A last April – A15, FMO and Global Ventures – doubled their investments.

As a result of this round, which is currently one of the largest in Egypt and the countries of the Middle East and North Africa, Paymob’s total funding exceeded $68.5 million.

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Paymob works with businesses and merchants of all sizes. Its multi-channel payment infrastructure allows them to accept payments in a variety of ways, which CEO Islam Shawki says is the largest in Egypt. These different options include bank cards, mobile wallets, QR payments, bank card installments, BNPL, and consumer credit payment options. Paymob also has a POS solution for offline merchants where they can accept card payments in store.

“Our mission is that we want to help merchants grow,” explained Shawsky, who launched a fintech company in Cairo in 2015 with Alain El Hadj and Mostafa Menesi. “So together we are offering merchants, whether they are SMBs or an international brand, the ability to accept all of these payment methods and thus increase the likelihood and likelihood for them to make a purchase and hopefully increase revenue.”

Last year, Paymob had over 35,000 local and international merchants using its payment gateways such as Swvl, LG, Breadfast and Homzmart. That trade number, which now includes the likes of Vodafone, LG, Virgin, Chalhoub Group and Decathlon, has tripled to over 100,000. Shawky says Paymob plans to reach a million small and medium businesses in the next couple of years.

This is a grandiose forecast, given that there are more than 3 million small and medium-sized enterprises in Egypt. However, Paymob’s strategy to reach this figure is supported by the launch of a new product in partnership with Mastercard: Tap-on-Phone contactless payments.

For micro and small sellers, the cost of acquiring a vending machine and related equipment can be cutthroat. This represents a significant barrier to scaling as they will need to process large volumes over a long period of time to recoup these costs.

The Tap-on-phone product uses contactless payment technology to enable these merchants to turn their NFC-enabled smartphones—personal or commercial—into a POS by downloading the Paymob-powered app.

“For us, this is a game-changer for face-to-face transactions because it opens up the market for us and helps us grow significantly,” the CEO said. He also mentioned that the product, aimed at new merchants and acting as a complement to traditional point of sale devices, puts Paymob ahead of competitors such as Fawry and PayTabs. Similar companies in other regions of Africa include CinetPay, Ozov and Flutterwave.

Paymob’s extensive product suite is what attracted co-lead investor Kora Management. According to Nitin Saigal, the firm’s founder, Paymob is “innovating at scale in offline acquiring and online payment gateways as Egypt and the Middle East transition from a predominantly cash-based to a heavy digital transaction mode.” Other plans for merchants include the introduction of a new checkout platform and the launch of cards for B2B transactions.

Since last year, various fintech companies in Egypt have been praising the initiatives of the main bank (the Central Bank of Egypt) to expand financial inclusion, and Paymob is no exception. Shawki says it initiatives – including the issuance of over 20 million Meeza cards and 25 million wallets, as well as licenses for companies to distribute and operate POS devices – are some of the reasons Paymob has seen significant growth.

Paymob reported that total payments last year were $5 billion; there is no way to know what that number looks like right now. But in other metrics shared by the company, it says its monthly volumes are up 4x year-on-year as of December 2021. According to its website, Paymob has processed over 120 million transactions.

Expansion in Pakistan could see Paymob grow faster by the end of the year. The Egyptian fintech company plans to add 100,000 merchants over the next two years from the South Asian country, home to over 4 million SMEs, according to the announcement.

Paymob claims to serve merchants in other markets, including Kenya and Palestine; however, it has not yet appeared in these regions. Instead, the company aims to several GCC and North Africa markets as this growth funding provides the necessary firepower to launch on them. Paymob will also aim to increase its market share in Egypt as well as introduce more offerings in its product suite, including expense management software and working capital provision.

“Paymob shares our mission and commitment to advancing the adoption of digital payments — the company has made impressive strides in supporting the growth and success of underserved SMEs,” said Ashish Aggarwal, director of co-lead investor PayPal Ventures.

This is PayPal’s first investment in the Middle East and North Africa and appears to be CVC’s second investment in Africa after South African open-fund startup Stitch. In spite of global slowdown in venture capital (so far reflection in africa the same), PayPal’s participation continues last year’s trend of global investors making their first deals, especially in the fintech sector, which accounted for 60% of total venture funding.

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