Egyptian fintech Paymob,
which enables merchants to accept digital payments online and in-store,
announced today it has raised $50 million in Series B funding.
PayPal Ventures, the global corporate venture arm of
PayPal, New-York-based venture capital Kora Capital, and London-based Clay
Point led the round.
New participating investors include Helios Digital
Ventures, British International Investment (formerly the CDC Group), and
Nclude, the venture fund launched by Global Ventures and three Egyptian banks.
Existing investors from its $18.5 million
Series A last April — A15, FMO, and Global Ventures — doubled
down.
The round, which is one of the largest at this stage
in Egypt and MENA, brings Paymob’s total funding to over $68.5 million.
Paymob works with businesses and merchants of all
sizes. Its omnichannel payment infrastructure allows them to accept payments
via various methods, which CEO Islam Shawky claims
to be the largest in Egypt. These different options include bank cards, mobile
wallets, QR payments, bank cards’ installments, BNPL, and consumer finance
payment options. Paymob also has a POS solution for offline merchants where
they can receive in-store card payments.
“Our mission is that we want to help the merchants
grow,” explained Shawky, who launched the Cairo-based fintech in 2015
with Alain El Hajj and Mostafa Menessy.
“So together we offer merchants, whether an SME or an international brand, the
ability to accept all those payment methods and thus, increasing the
probability and enhancing the probability for them to purchase and hopefully
grow the revenue.”
Last year, Paymob
had over 35,000 local and international merchants using its payment gateways
like Swvl, LG, Breadfast, and Homzmart. This merchant 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 SMEs in
the next couple of years.
It’s a grand
forecast considering Egypt has over 3 million SMEs. However, Paymob’s strategy
to reach that figure is backed by a new product launch in partnership with
Mastercard: Tap-on-Phone contactless payments.
For micro and small
merchants, the cost of obtaining a point-of-sale machine and its accompanying
hardware can be cutthroat. It presents a considerable barrier to scale as
they’ll need to process large volumes over a long period to recoup that
expense.
The Tap-on-phone
product leverages contactless payments technology so that these merchants can
turn their NFC-enabled smartphones –personal or commercial– into a POS by
downloading a Paymob-powered app.
“For us, this is a
game changer for face-to-face transactions because this opens the market up for
us and helps us grow tremendously,” said the CEO. He also mentioned that the
product, to be rolled out for new merchants while acting as a supplement to
traditional point of sale devices, allows Paymob to stay ahead of competition
such as Fawry and PayTabs. Similar companies in other regions across Africa
include CinetPay, Ozow 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 the offline
merchant acquiring and online payment gateway space as Egypt and the Middle
East transition from being primarily cash-led to a digital heavy mode of
transacting.” Among its other plans for merchants include introducing a new
checkout platform and the launch of cards to enable B2B transactions.
Since last year,
various fintechs in Egypt have lauded the apex bank’s (the Central Bank of
Egypt) financial inclusion initiatives, and Paymob is no exception. Shawky says
these initiatives —
including the issuance of over 20 million Meeza cards and 25 million wallets
and giving companies licenses to distribute and operate POS devices — are some
of the reasons why Paymob has witnessed remarkable growth.
Paymob reported a
total payment volume of $5 billion in 2020; it couldn’t be learned what this
number looks like right now. But in other metrics shared by the company, it
said its monthly volumes grew 4x year-on-year as of December 2021. And as at
2020, Paymob had carried out over 120 million transactions, per information on
its website.
The expansion to
Pakistan could see Paymob grow faster by year’s end. According to a statement,
the Egyptian fintech plans to add 100,000 merchants within the next two years
from the South Asian country, home to over 4 million SMEs.
Paymob claims to
serve merchants in other markets, including Kenya and Palestine; however, it is
yet to set shop in these regions. Instead, the company has its sights set on
a few GCC and North Africa markets as this growth financing provides the
required firepower to launch in them. Paymob will also pursue more market share
in Egypt as well as introduce more offerings in its product suite, including
expense management software and provision of working capital.
“Paymob shares our
mission and ambition of advancing digital payments adoption – it has made
impressive strides in supporting the growth and success of underserved SMBs,”
said Ashish Aggarwal, the director at co-lead investor PayPal Ventures, in a
statement.
This is PayPal’s
first MENA investment and seems to be the CVC firm’s second in Africa after
South African open finance startup Stitch. Despite a global slowdown in
venture capital (yet to reflect in
Africa as much), PayPal’s participation continues the trend
from last year that saw global investors make their first set of deals,
particularly in fintech, a sector that contributed 60% of the total VC funding.
