Abu Dhabi-based FlapKap, a leading fintech platform providing revenue-based and embedded financing solutions in the MENA region, today announced the completion of $34M in new debt and equity funding.
The funding round was led by BECO Capital and welcomed significant new investment from Pact VC. The round also included follow-on investment from A15, Nclude, and QED Investors and debt financing from Channel Capital. This capital injection brings FlapKap’s total funding to $37.6M.
With this pre-Series A funding, FlapKap will expand its capabilities in the UAE and GCC region, deploying more capital to empower SMEs in the space and helping them maximise their growth potential.
The company will also enhance its technology infrastructure to launch trade finance products exclusively designed for B2B businesses.
Led by Ahmad Coucha, Khaled Nassef, Sherif Bichara and Kunal Harisinghani, Egyptian-born, Abu Dhabi Hub71 headquartered, FlapKap launched to help e-commerce businesses and other consumer-facing industries like retail and restaurants scale their inventory and digital ads through instant funding, with the flexibility to pay later.
The company focused on supporting these businesses that had limited access to traditional bank loans or venture capital by streamlining the process of underwriting and has since expanded its services to support a broader range of SMEs.
Flapkap could easily evaluate and approve prospective companies by connecting their platform to the businesses’ e-commerce sites and social media accounts, providing the merchants with an offer less than 48 hours after they sign up.
FlapKap has now broadened its financing reach to serve a diverse range of online and offline businesses. By leveraging unconventional data sources, the emergence of open banking, an AI powered credit model, and the growing digital footprints of SMEs, FlapKap has developed a data-driven approach that automates the lending process and reduces operational costs.
The platform integrates with third-party verified data to provide precise underwriting of businesses. FlapKap assesses businesses across multiple platforms, including e-commerce, advertising, online reviews, payment gateways, PoS systems, bank accounts, and Enterprise Resource Planning (ERP) platforms.
Speaking on the round, Ahmad Coucha, FlapKap CEO and Co-founder said, “The growth in data has made it easier than ever to support SMEs, and at FlapKap, we’re rising to the occasion. By leveraging data and technology, we’re breaking down the barriers that SMEs face in accessing financial services. We’re now able to assess risk more accurately and reduce underwriting costs, addressing the two biggest obstacles faced by incumbent financial institutions. This investment will support our continued growth in the UAE and Egypt and further our expansion into the rest of the GCC, and help us gain valuable insights from our high-calibre investment partners.”
With the new funding, FlapKap will continue its mission to address MENA’s $180 billion SME financing gap, as estimated by the International Finance Corporation.
With an estimated 19-23 million MSMEs in the MENA region, including both formal and informal, these enterprises make up 80-90% of all businesses across most MENA countries. Traditional financial institutions have often overlooked this MSME segment due to inadequate infrastructure, limited data, and perceived risks.
This oversight has left millions of viable businesses without the required support to scale their operations and boost their revenues.
FlapKap’s entry into this underserved and untapped market has already resulted in the doubling of its quarterly originations and disbursements over the past two years, while building a strong network of merchants across Egypt and the UAE.
Walter Gontarek, CEO at Channel Capital added, ‘We’re impressed with FlapKap’s operations across the MENA region and are excited to partner with them in this round. Their experienced leadership team has identified major opportunities in this multi-billion-dollar market, and their impact on SME growth is commendable. In just two years, the company has grown rapidly, exemplifying how data and technology can drive market-creating innovation’
Karim Abadir, Principal at BECO commented, ‘We’re thrilled to back the FlapKap team as they continue to bridge the SME financing gap in the MENA region with their innovative, data-driven approach. Their commitment to leveraging technology to provide tailored financial solutions is transforming how underserved businesses access the support they need to grow. We believe in their vision and are excited to partner with them as they scale their impact across the region, empowering more SMEs to reach their full potential..’
Reem Wyndham, General and Founding Partner at Pact VC shared, ‘We were impressed by Ahmad and his team’s clear vision and execution. FlapKap’s innovative model is a game-changer in SME financing and we’re excited to support their success.’
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