UAE-based fintech firm raises $41 million in new funding round

The UAE-based financial technology start-up and digital banking app YAP on Monday said it has raised $41 million. The company will utilise the new funding to expand into new markets and enhance its technology offerings.

The funding round was led by Saudi Arabia-based investment company Aljazira Capital. Global investment conglomerate Abu Dawood Group, Saudi Arabia’s Astra Group, Dubai-based private equity business Audacia Capital and family offices also participated in the funding round, the company said.

The Fintech platform, which was launched in 2021 in partnership with RAKBank and has more than 130,000 users signed up on its app, plans to complete its Series A funding by the end of the year, it added.

Redefining Fintech Sector

“YAP continues to redefine the Fintech sector in the region,” said Marwan Hachem, co-founder and group chief executive of YAP.

“The interest that we have received from investors shows that there is a strong demand for Fintech products,” he said.

Demand for digital payments and other Fintech services has grown due to the onset of the coronavirus pandemic, as more people use online banking services to transfer money and pay for e-commerce transactions.

Fintech is transforming the delivery of financial services across the Middle East and the region has one of the world’s highest-potential Fintech ecosystems. Fintech is driven both by technology-enabled innovation that improves existing financial services, but also provides routes for unbanked populations to access financial services.

YAP, which can be downloaded on iOS and Android devices, provides spending analytics, card controls, money transfer and bill payment service, real-time notifications of purchases, withdrawals and transfers, the company said.

The digital banking app, which does not require a minimum balance and salary transfer requirement, also offers a virtual card for online shopping.

“We look forward to expanding into new markets and enhancing our offering in the months ahead with these investments,” said Anas Zaidan, co-founder and managing director of YAP.

YAP received regulatory approval in Pakistan and Ghana and plans to launch in Egypt soon, it said.

The Fintech platform has partnered with Bank AlJazira to launch its consumer and business banking platforms in Saudi Arabia. YAP ties up with banking partners to provide Iban sponsorship for users, the company added.

YAP’s product development pipeline includes a multicurrency offering, products for children and households, equity trading, loans and buy-now-pay-later products. Support from government-backed entities in the UAE has proved crucial for local Fintech start-ups.

Fintech Funding Surges Globally

According to global consultancy firm KPMG, FinTech funding worldwide surged 68% to $210 billion in 2021.

A record 5,684 deals were signed through mergers and acquisitions, private equity and venture capital last year, the KPMG report said. The payments segment continued to attract the lion’s share of funding among FinTech subsectors, accounting for $51.7 billion in investments globally.

Investment in FinTech companies in Europe, the Middle East and Africa stood at $77.4 billion from 1,859 deals last year. More than 800 FinTech companies operating in different segments such as payments, InsureTech and cyber security across the Middle East are expected to raise more than $2 billion in venture capital funding this year to boost their growth.