Accel leads $4 million investment in Egyptian company card platform Swypex

Image Source: Swapex

Credit cards are gaining popularity in Egypt, with more than 30 million in circulation (especially prepaid cards, which are used more than debit and credit cards combined). Card use has surged about 14% in the past four years, largely due to incentives launched by fintech companies and banks to attract millions of Egyptian consumers who previously relied mainly on cash for transactions.

The adoption of corporate cards tells a different story. Businesses of all sizes are hesitant to adopt corporate cards due to limited access and insufficient spending controls over their use.

Traditionally, banks have been the main providers of corporate cards across the country; however, fintech companies are now entering the space to increase adoption. Swypex, one such fintech company that provides corporate cards and management tools to businesses, has raised $4 million that it will use to expand the business and technical capabilities of its platform.

Image Source: Swapex

A report by the United Nations Development Program shows that approximately 3.8 million enterprises in Egypt face the challenges of a complex and rigid financial system. Like many businesses in Africa, these businesses use multiple disconnected methods to handle their finances, resulting in inefficiencies. Employee fraud is also a problem, with companies losing an average of 5% of revenue each year to fraudulent activity stemming from cash transactions such as asset misappropriation and financial misstatements.

ready to launch

However, there is a huge push from a regulatory perspective; for example, Egypt's top bank, the Central Bank of Egypt (CBE), has launched initiatives such as the Instant Payments Network (IPN) to reduce cash transactions and encourage digital payments.

Several Egyptian fintech companies, including Swypex, are taking advantage of such measures to launch essential financial services while adhering to central bank guidelines. CEO Ahmad Mokhtar explained that the startup was founded in early 2022 but is now just emerging from stealth mode and is spending its first year acquiring the necessary licenses and ensuring regulatory compliance. properties and work with payment processors and bank sponsors. Swypex launched a beta version to 100 customers in December.

“We interviewed hundreds of different businesses, from startups to SMEs, to large companies, enterprises and public companies, to understand the challenges they face at different stages,” said co-founder with Tarek Mokhtar (CPO) and Sasan said the startup's Mokhtar. “We realized that there were some common pain points that hadn't been addressed in the past year or two, like businesses using mostly cash and losing visibility into their funds, or using banking services that were a little bit outdated, so they had to go to the bank. Sign paper documents and documents to advance business.

One-stop financial management platform

Mokhtar said Swypex offers an “unlimited” number of company cards to corporate employees. The platform enables these businesses to set smart controls to manage spending, such as setting different limits and specifying access to ATM withdrawals and online transactions. After a transaction, employees can upload receipts, invoices and expenditure details, which will be consolidated into a centralized dashboard with consolidated data from the government’s e-invoicing platform. In addition to ERP and accounting software integration, Swypex provides businesses with a streamlined and comprehensive overview of all fees and expenses in a single location.

“Businesses using our platform can see analytics on the distribution of spend at each department, merchant, individual and category level,” said Tarek Mokhtar, the company’s chief product officer. “We also categorize all spend on the platform to provide deeper insights into the business. financials and each project, which will help businesses make more data-driven decisions based on the real-time visibility we provide.

Swypex's competitors in the African corporate card space include YC-backed companies such as Boya and Bujeti. In Egypt, it is banks such as HSBC and the National Bank. Mokhtar believes Swypex is a better option for businesses because it allows for more customization within its products and offers a wider range of features and services, including unlimited card issuance and advanced controls. “Our focus on user experience and instant control over these cards, such as blocking them, and having all the automation built in, is new to the market,” the CEO said.

The two-year-old all-in-one financial management platform offers businesses their first three cards for free, generating revenue through interchange fees, floating rates and foreign exchange markups.

Will corporate cards proliferate in the next few years?

Accel, a storied venture capital firm making its first investment in the MENA region (although it backed an African remittance app), led Swypex's $4 million seed round. Investors participating in this round include Foundation Ventures, The Raba Partnership and other angel investors.

For a new startup emerging from beta just a few months later, this is significant, especially in a challenging funding environment where traction and revenue are top priorities. But it's attracting investment even before its official launch, and for good reason: Swypex has the potential to address a sizable market (it's targeting the cards and payments market worth more than $10 billion, with an expected compound annual growth rate over the next three years (10%) Mokhtar emphasized this, as well as the founder's background in developing products at scale for multinational companies such as Twitter, PlayStation and Spotify.

“As the payments landscape continues to digitize, the opportunity to provide Egyptian businesses with modern fintech products becomes even more important,” Accel Vice President Richard Kotite said in a statement. “Ahmad, Tarek and Sasan found comprehensive B2B solutions There is a gap in the market for a solution that can solve many of the key pain points that businesses often face while driving a step change in efficiency. We see a real opportunity for Swypex to become a fintech champion in the Middle East. The team is technically experienced and ambitious. It was a pleasure to join them on their journey.

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