Happy Friday! We’re extremely excited at FWDstart HQ about Revolut’s imminent entry into the UAE – and it may not be alone for long, with rumours swirling that LATAM fintech giant Nubank is eyeing the Gulf market as well.

Regional fintech startups, brace yourselves – things are about to get very interesting.

Let’s dig in 👇

P.S. 🟠 Our deep dive this week, revisits the history of Talabat and its journey leading to the $170 million acquisition by Rocket Internet in 2015. You can check it out here.

This week’s round-up is a 5 min read:

• 💸 Fintech giant Revolut seeks licenses to operate in the UAE and Saudi

• 💰 Qatar’s TESS Payments secures funding to launch one of the country’s first online-only banks

• 🇩🇿 Algeria’s edtech LabLabee closes $3.4M seed ahead of US expansion

• 📲 UAE’s Botim launches ‘send now, pay later’ remittance service

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🚀 Startup funding round-up

Seez (🇦🇪 UAE), an automotive SaaS startup providing AI-powered software solutions for car dealerships and OEMs, has raised $4.2 million from several international investors including Pinewood Technologies Group.

LabLabee (🇩🇿 Algeria), an edtech platform offering hands-on training in telecom networks, has raised $3.4 million in a Seed funding round led by Reach Capital, with support from Classera, Brighteye Ventures, e& capital, and business angels Cedric Sellin and Mohammed Husamaddin.

Userguest (🇲🇦 Morocco), a hoteltech platform helping hotels optimise their revenues, has closed a $2.4 million Seed funding round led by Al Mada Ventures, with participation from CDG Invest, Saviu Ventures, UM6P Ventures, Kalys VC, Plug & Play, and angel investors.

SETTLE (🇪🇬 Egypt), a B2B fintech platform modernising financial operations for enterprises, has raised a $2 million pre-Seed round, led by Shorooq Partners, with support from El Sewedy Capital Holding, Acasia Ventures, and Plus VC.

Darent (🇸🇦 KSA), a proptech platform for managing rental properties, has closed an undisclosed Seed funding round, led by Al Tawuniya Insurance, with participation from the Morgan Stanley Inclusive Ventures Lab and BIM Ventures.

Farid (🇪🇬 Egypt), an edtech platform focused on character education and mental health support for children and youth aged 3 to 18, has raised $250,000 in a pre-Seed funding round from Saudi businesswoman Amal bint Abdulaziz Al-Ajlan. 

TESS Payments (🇶🇦 Qatar) has secured an undisclosed investment from Singapore's Fingular to establish one of Qatar's first online-only banks, with plans to issue over $600 million in loans to Qatari residents within three years.

Plain Tiger (🇦🇪 UAE), a B2B marketplace connecting hotels with eco-friendly suppliers, has secured an undisclosed investment from COREangelsMEA, part of COREangels International.

UmrahCash (🇸🇦 KSA), a fintech enabling pilgrims in Mecca, Medina, and Jeddah to make payments from their home countries and receive Saudi Riyals upon arrival, has secured a $500k investment from Adaverse to expand its operations.

Fintech

💸 Fintech giant Revolut seeks licenses to operate in the UAE and Saudi

💸 Revolut has applied to the UAE’s central bank for an electronic-money institution license to offer remittance services, with the ultimate goal of securing a full banking license, similar to the one it recently obtained in the UK.

• Founded in 2015, Revolut began as a multi-currency prepaid card and app, evolving into a financial super-app offering services from international transfers to stock trading. It now serves over 45 million personal and 500k business customers globally.

💰 The share sale: This move follows a $45 billion valuation in a secondary share sale, which included Abu Dhabi’s Mubadala as a new investor.

• The sale saw $500 million in employee shares sold, with CEO Nik Storonsky selling up to $300 million.

📖 The back story

Revolut first entered the UAE in 2022, establishing a team of 140 at the Dubai International Financial Centre. CEO Nik Storonsky has long aimed to enter the Gulf market, though licensing challenges have previously restricted UAE residents from opening accounts.

Alongside its UAE ambitions, Revolut is also eyeing neighbouring Saudi Arabia as a growth market.

To support its expansion, Revolut is hiring key roles in finance, legal, compliance, crypto, engineering, and product development in Dubai.

⚙️ Breaking it down

The UAE, with its large expat population and booming remittance industry, presents a significant opportunity, particularly in the India-UAE remittance corridor, where $21.6 billion was sent to India in 2023.

Revolut’s competitive exchange rates close to the interbank rate make it well-positioned to attract customers in this lucrative market.

🐂 Bull case

1. The UAE’s large expat population, many of whom are familiar with or already use Revolut, positions the company for a quick launch.

2. Outward remittances from the UAE totaled $38.5 billion in 2023, one of the highest globally, despite a 3% YoY decline.

3. Abu Dhabi’s Mubadala sovereign wealth fund is expected to help Revolut secure regulatory approvals, aiding in its pursuit of a full banking license in the UAE.

🔮 Flashforward

Revolut’s expansion is likely to attract more global fintechs to Dubai. Sources suggest LATAM’s Nubank, with over 100 million customers, is also eyeing MENA for its next move.

Revolut’s entry will disrupt the market, pushing regional players to innovate. Startups that aren’t prepared will struggle. But for customers, this increased competition should lead to better banking services, which we’re counting a win.

💰 Investments round-up

🇪🇬 A coalition between EYouth and prominent Egyptian businessmen, including Mohamed Farouk, Ahmed Tarek, Mustafa Abd Ellatif, and Mokhtar Ahmed, has launched NextEra Education with an investment of $42 million (EGP 2 billion). The initiative aims to modernise Egypt's educational landscape by integrating advanced AI technologies, revamping traditional curricula, and partnering with prestigious international universities to bring world-class education to the country.

🇸🇦 Sharaka Financial, headquartered in Riyadh, has launched the Sharaka Ventures Fund, focusing on early-stage tech startups in the MENA region, especially in fintech and business software. CEO Faris Al-Rashed emphasised the growing demand for tech funding in Saudi Arabia’s venture capital market. Established in 2023, the firm is licensed by the Saudi Capital Market Authority to manage VC and private equity funds.

🇦🇪 Abu Dhabi’s MGX, alongside BlackRock, Microsoft, and Global Infrastructure Partners, has launched a $100 billion AI infrastructure investment partnership. Founded in March, MGX focuses on AI infrastructure, semiconductors, and advanced technologies like AI models, software, and robotics, supporting the UAE’s push to develop its future economy.

🇧🇩 VentureSouq has led a record $12M pre-series B round for Pathao, marking the largest fundraising of its kind in Bangladesh. Pathao, a leader in logistics, ride-sharing, and food delivery, is expanding its fintech presence with Pathao Pay, a digital wallet, and Pay Later, the country’s first and largest buy now, pay later solution.

⌨️ Tech round-up

📲 Astra Tech has launched the MENA region’s first ‘Send Now, Pay Later’ (SNPL) remittance service via its Botim Ultra app. The service allows instant international money transfers with deferred payments, targeting the UAE’s expat population. Astra Tech aims to capture a larger share of the growing remittance market. Botim’s nine million users can pre-register for the service before its official launch.

🤖 Microsoft and G42 are setting up two artificial intelligence centres in Abu Dhabi, following a $1.5 billion deal and G42's agreement to divest from China. One center will focus on developing industry standards for responsible AI use, while Microsoft's first 'AI for Good Research Lab' in the region will work toward social goals like enhancing food security and climate resilience.

🚀 Spanish startup Halo Space is set to localise most of its high-altitude balloon capsule manufacturing in Saudi Arabia, ahead of its first unmanned test launch from Al-Aflaj oasis. Saudi Arabia will serve as a key hub for commercial near-space trips, contributing to its tourism goals under the $1.25 trillion economic reform plan. Halo Space, which plans 400 commercial trips annually by 2030, aims to take passengers 35km above Earth, offering views of the planet’s curvature for €150k per person

📰 Recommended Reads

• Triska Hamid. Look at the fall in startup investment. Now take a closer look…

• Reed Albergotti. A radical idea to make the UAE an AI innovation hub