A large part of the population of Egypt lacks access to traditional banking, which forces many to trust cash transactions and informal loans. Khazna, a Fintech startup founded in 2019, is addressing this problem by offering adapted financial services for low and medium -income workers. The company offers solutions such as salary advances, digital payments and microloans to help employees and contractors access very necessary financial services.
Khazna recently obtained $ 16 million in funds prior to series B, which raised its total financing to more than $ 63 million. The investment will support its expansion plans while preparing to request a digital banking license in Egypt and expand to Saudi Arabia.
When we covered the Fintech in 2022, he had just collected $ 38 million prior to Serie A with more than 150,000 customers in their products. Today, Khazna has increased its user base to more than 500,000 people; That number is half of what aimed twice by the end of 2022, according to what Saleh shared at that time.
The company focuses on workers who earn three times less than the minimum salary of Egypt, providing them with affordable financial tools. Around 100,000 users receive their payroll through Khazna, which allows the company to integrate financial services such as loans and safe directly in their payroll accounts.
For the remaining 400,000 users, Khazna offers loan services, helping workers and pensioners access to credit. The CEO Omar Saleh explained that the company initially focused on credit loans and pensions backed by payroll, which contributed to its break-even last month.
“What we did in the last two and a half years was to focus on our central product, which is the credit offer to payroll beneficiaries and pensions and also non -guaranteed loans to concert workers,” said co -founder and CEO Omar Saleh a britcommerce on a call. “This is the most profitable and central product on our trip, and doing it well was very important because it has helped us achieve profitability.”
On the way to become a digital bank
Khazna offers other services such as invoices payments, buy now, pay later, medical insurance and a rental product with option. But by embedding the payroll and loans, it is moving strategically to become a full -right digital bank for the unattended communities of Egypt.
But one thing is missing: unlike traditional banks, Khazna, like many Fintechs in Egypt, does not have access to customer deposits, which makes it expensive to finance loans. Until now, Khazna has depended on the financing of the wholesale debt in dollars (USD) and the Egyptian pound (EGP) to finance its loan operations.
To reduce indebted costs and offer more affordable loans, Khazna is now working to obtain a deposit taking in Egypt. This license would allow the startup to accept customer deposits, allowing it to reduce its cost of funds.
“The biggest game change is that we can have access to user deposits. There is a great opportunity for us to capture a part of that market also in a way that will make our financing cost much more attractive than it is today, and ultimately, that would put us in a very differentiated position, “he said.
Khazna points to mid -2016 to ensure the banking license of the Central Bank of Egypt, which established its regulatory framework for digital banks in July 2024.
But as the six -year -old Fintech begins with that process, is simultaneously relieved in Saudi Arabia, where there is a growing demand for consumer finance solutions. Unlike BNPL players such as Tabby and Tamara, which focus on the short -term BNPL credit, Khazna hopes to differentiate with medium -term credit products such as salary access cat .
Expansion plans, including a not so imminent opi
Another reason why Khazna is to prioritize Saudi is her strong connection with Egypt, says Saleh. With almost three million Egyptians living in Saudi, the remittance corridor of Egypt-Saudi is one of the largest in the world, which presents the opportunity to offer cross-border financial services, combining credit offers with currency solutions (FX).
Beyond the size of the market and the adjustment of the product, the capital markets of Saudi Arabia are also a driver in Khazna’s decision, according to Saleh. Tadawul is one of the most liquid and retail securities bags, launching several opi in recent years.
For that reason, Khazna plans to have 40-50% of her business from Saudi in the next four years, which makes him eligible for a public list in Tadawul. For investors in early stages that have backed the company for four or five years, Saleh says that this provides a clear path to a high value exit.
Of course, Khazna will finance this expansion with the recently high growth capital. However, macroeconomic challenges in Egypt in the last two years had a hand in the structure of this pre -sale B.
Between 2022 and 2023, Egypt faced monetary devaluations and economic instability, which makes fund collection more difficult for new companies and companies. The general deceleration in the flow of offers reflected this, since investors adopted a cautious approach to new Egyptian companies. But 2024 brought an important change, with more than $ 50 billion in foreign direct investment (FDI) that flows to Egypt after economic reforms and a more flexible exchange rate. As a result, investor trust returned, which caused a renewed interest of global and regional investors.
As such, Khazna welcomed the participation of new and existing investors, including global investors such as Quona and Speedinvest, as well as regional financial institutions and investment signatures such as Sanad Fund for MSME, ANB Seed Fund (administered by ANB Capital), Aljazira Capital (the investment (the ARM investment of the Aljazira Bank of Saudi Arabia), Tibas Ventures (the arm of the risk capital of Ificbank of Turkey), Khwarizmi Ventures, Nclude (the Fintech Fund established by the largest national banks in Egypt) and Icu Ventures.