UAE-based fintech startup YAP is in talks with a clutch of investors – global as well as from the Middle East venture capital (VC) funds – for raising $20 million funding.
The investment is for mainly financing the digital banking venture’s expansion plans in Africa and South Asia.
Marwan Hachem, founder and Group chief executive officer of YAP, confirmed to Arabian Business that the venture is currently tapping investors for another round of capital raising.
“Our goal is to raise another $20 million before completing our Series A round by the end of this year,” Hachem said.
“We are talking to several local and international VC funds,” the YAP top executive revealed.
When finalised, the latest round will take the total funding of YAP in Series A to $61 million.
The fintech startup raised $41 million in July this year from venture capital firms and Family Offices, led by Saudi Arabia’s Aljazira Capital.
Abu Dawood Group, Astra Group, Audacia Capital and few prominent Family Offices were the other investors in YAP in its last round of fundraising.
Investor circles said there could be concerns as YAP is hitting the capital market amid a slowdown in funding for startups globally, as investors became more cautious.
Hachem, however, said the funding slowdown was due to investors questioning whether business models are sustainable.
Additionally, funding is also linked to regulatory approval, which could provide a need for consolidation, he said.
“However, businesses with robust models, great MVPs (minimum viable products) and with a well-versed go-to-market strategy will continue to gain capital,” the YAP founder said.
YAP’s latest move to raise capital is mainly intended to fund its aggressive expansion plans in the African market.
“We believe there is a real need and opportunity in Africa and that is where we are putting a big focus. Ghana is our entry into the African market and we expect to open in other countries on the continent within the next year,” Hachem told Arabian Business in an interview last month.
The digital banking fintech is also currently in the process of expanding its operations into Saudi Arabia, a major GCC market.
As part of its aggressive plans to grow its business in the country, YAP has partnered with Bank AlJazira in Saudi Arabia, where it is expected to soft-launch its operations this month, before going fully live in the first quarter of next year.
Hachem said the startup was also building scalable innovative products and services for consumers based on a data-driven approach, which will consumers go cashless by 2030.
He said going cashless was also a goal for MENA markets.
“Both the UAE and Saudi Arabia have a vision to achieve a cashless society by 2030. To reach this goal, there is a need for fintechs like ours to create opportunities for them that will motivate and enable consumers to go cashless,” Hachem said.
The YAP founder said there were several other changes and trends taking place in the financial sector in the region, as also globally.
“We are watching [them] closely,” Hachem said, without disclosing the venture’s future moves in the sector.
He, however, said with the rise in fintech players, there was also a change in regulation as central banks consider how to integrate them in areas like digital banking, bitcoin and blockchain.
“We are a digital banking platform, which gives us more flexibility to update our technologies and adapt to the consumer’s needs.
“However, we chose to work with traditional banks to ensure that we comply with the regulators in each market and their licenses to enable our services to work,” Hachem said.
YAP, which is said to have launched the first financial super app in the Middle East, has more than 130,000 users signed up for the app since its launch in 2021 – a record number for the region.
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