Connect Money wins $8 million to enable non-bank businesses to offer integrated financial services

Banking-as-a-Service (BaaS) platforms play a key role in providing access to digital financial services by introducing fintech capabilities to non-banking businesses. Many companies leverage these platforms to avoid the need to build their own technology infrastructure and the bureaucratic processes of obtaining regulatory approvals required to offer financial services, including card payments and loans.

Globally, projections show that over the next decade, businesses will continue to leverage BaaS platforms to launch new financial services, increase revenue, and improve customer experience and retention. Increased adoption will push the BaaS market value to $22.6 billion by 2032, supported by a compound annual growth rate (CAGR) of 19.3%, according to a recent report from Allied Market Research.

As BaaS becomes ubiquitous, Egyptian fintech Connect Money is looking to leverage its popularity to explore emerging business opportunities in African markets. The startup enables commercial businesses to issue white-label debit and credit cards to their customers to access various financial services, including payments and credit.

Launched earlier this year, the fintech is now eyeing growth in Egypt and abroad, including markets like Morocco and Kenya, supported by $8 million in seed funding from a co-led round by Egypt-based venture capital firms DisrupTech Ventures, Algebra Ventures and Lorax Capital Partners. , with the participation of One Stop Capital and MDP.

Connect Money was co-founded by Ayman Essawy (CEO), Wadi Jalil (CTO) and Abdelaziz Sarhan (COO), who saw the opportunity to help businesses finance their customers.

“We’ve seen it on Amazon with payment services and on many other digital platforms. We believe that even traditional companies are capable of providing banking services to their customers and increasing consumer loyalty, ultimately becoming real banks. This is what we are trying to build; a one-stop shop for traditional and digital businesses so they don’t have to build the infrastructure or invest millions in CapEx. They simply pay for a subscription service per card per month, which we then manage from the back end,” said Essawy, who, before founding Connect Money, co-founded LuckyOne, a consumer app for credit, Cashback offers and rewards. He is also part of the team that launched DSquares, a 12-year-old loyalty platform provider with a presence in several markets, and which is expected to have its IPO in Saudi Arabia “within the next two years.”

Essawy said Connect Money has many use cases in various areas, including agriculture where, for example, supply chain companies can provide white-label cards and become banks for farmers.

“Fundamentally, the whole value proposition is about connecting these businesses to cash users. So we talk about embedded finance as the core market,” he said.

In general, Essawy said, the platform can be leveraged by businesses, especially those with long and costly settlement cycles, to make instant payments and disbursements. Businesses can also integrate loyalty programs into cards, while lenders leverage technology to digitize their operations and provide credit. Essawy said its clients benefit from these capabilities at a fraction of the cost and without long waiting periods to acquire licenses from regulators to offer financial services.

Connect Money’s support to businesses includes card issuance, KYC, customer support and mobile banking application development.

The startup joins a handful of fintechs in Africa’s burgeoning BaaS space, including Nigerian companies Anchor, Maplerad and Bloc, which are making financial services easily accessible to the general public by enabling businesses to provide tailored financial services to their customers. consumers.