UAE-based fintech startup Wafeq recently raised $3 million in seed funding to expand its presence in Saudi Arabia and enter the Egyptian market. The company, founded in 2019, provides user-friendly financial software tailored to the accounting and finance needs of small and medium-sized enterprises (SMEs).
The funding round was led by Raed Ventures, with participation from Wamda Capital. In an exclusive interview with Arab News, Wafeq CEO Nadim Alameddine explained that Saudi Arabia is the company’s largest and most important market, with plans to double down on growth in the kingdom. Alameddine added that Wafeq already serves some of the region’s most successful SMEs and startups, and aims to help businesses comply with local accounting regulations as it grows.
Wafeq’s software is trusted by over 5,000 business owners and professional accountants across various industries, processing more than $117 million in monthly invoices. SMEs make up over 98% of all companies in Saudi Arabia, 90% in Egypt, and 94% in the UAE, providing Wafeq with a vast market to fuel its operations.
Digitization of accounting practices in these markets is undergoing significant changes due to mandatory e-invoicing and digital reporting. Wafeq’s strategy in Saudi Arabia includes building more localized features, ensuring successful implementation of the second phase of the country’s e-invoicing regulations by the Zakat, Tax and Customs Authority (ZATCA), and offering e-invoicing API solutions to more businesses.
Initially targeting startups, Wafeq has acquired customers from leading businesses such as Tabby, Lean Technologies, DAPI, Fenix, and PiFlow. The company plans to use its funding to expand its presence in Saudi Arabia and the UAE while entering the Egyptian market.
Alameddine stated that Egypt has the highest percentage of SMEs, but these businesses have limited access to tech solutions that can support their operations. With Egypt implementing e-invoicing requirements and soon e-receipts for businesses, Wafeq aims to have a positive impact in the country, acquiring new customers and creating local jobs.
Wafeq’s standalone e-invoicing API will play a significant role in the company’s expansion to Egypt, helping startups and businesses establish reliable third-party e-invoicing and remain compliant with regulations. Alameddine expressed excitement about entering the Egyptian market with the support of Raed Ventures and Wamda Capital.
Talal Alasmari, founding partner at Raed Ventures, highlighted Wafeq’s role in solving a problem that affects thousands of businesses in the region, saying that the digitalization of accounting practices will increase operational transparency, create efficiencies, and contribute to economic growth.
Wafeq operates a Software as a Service (SaaS) business model, aiming to make its software easy and affordable for businesses. Alameddine explained that signing up for Wafeq is free, with a basic package available for customers starting a business. For those with more complex requirements, Wafeq offers various pricing options based on clients’ needs and invoicing volumes.
Raed Ventures, a venture capital firm founded in 2015, focuses on early-stage startups and has invested in notable companies like SWVL, Tabby, and Trella. Wamda Capital, founded in the UAE in 2014, is a leading venture capital firm in the region with a portfolio of over 70 investments, including Careem and Nana.