Dubai FinTech platform baraka raises $20 million to fuel growth

Baraka, a Dubai-based zero-commission investment platform, has raised $20 million in a new round of funding as it aims to expand into new markets and increase its services.

The latest investment round, led by Valar Ventures – a New York-based venture capital firm backed by entrepreneur Peter Thiel – also saw the participation of global investment firm Knollwood.

With this new investment, baraka aims to “double its presence across the GCC and Egypt markets, and drive customer acquisition,” the startup said on Wednesday.

The company will improve its app and add new services over the next 12 months, including access to new features such as dividend reinvestment plans and expanded hourly trading, it said.

Launched last year, Baraka is headquartered in the Dubai International Financial Center and is regulated by the Dubai Financial Services Authority.

It helps investors across the region access commission-free investing and access to more than 6,000 US stocks and exchange-traded funds (ETFs).

Starting at $1, investors on baraka can potentially build diversified portfolios and long-term wealth by taking advantage of global equity markets, and achieve financial independence.

The app, currently available in the United Arab Emirates, Saudi Arabia, Bahrain, Oman, Kuwait and Egypt, features a simplified dashboard where investors can monitor and track their portfolios, a content hub that includes daily market news and an investment academy for users to build and test their trading knowledge.

“In just one year since our launch, tens of thousands of users have signed up for baraka,” said company founder and CEO Feras Jalbout.

“By empowering the next generation of investors in our region with affordable and comprehensive investment choices, we remain committed to enabling financial inclusion for millions of investors across Mena [Middle East and North Africa].”

Baraka, which has raised $25 million so far, is a Y Combinator-backed company and is also part of Abu Dhabi’s global tech ecosystem, Hub 71. Previous investors, in previous funding rounds, included Class 5 Global, Global Founders Capital and Venture Souq.

The company secured regulatory approval from the DFSA to operate in the United Arab Emirates last August as it sought to capitalize on the Mena region’s demand for e-commerce during the Covid-19 pandemic.

As part of its growth plans, baraka intends to create further access to regional economies where it aims “to secure licensing at some point in the future”.

It has committed the majority of the new funds to “new markets and creating more access to local exchanges for regional investors”.

In an effort to attract global investors to the Middle East, baraka is working with local exchanges and regulators to provide access to local market trading on its app.

Users of the baraka app receive daily financial news in English and Arabic to help them make informed and independent investment decisions.

“We are proud to support the world-class team that is taking shape at baraka, with our first investment in the Middle East,” said Andrew McCormack, general partner at Valar Ventures.

“The region’s new FinTech ecosystem has huge potential and we are encouraged by the early signs of traction that baraka has been able to demonstrate. We really look forward to working closely with the company as they move into this exciting new the growth phase across the region.”

Almost 56 percent of baraka users are under the age of 30, while more than 50 percent of all users are first-time investors.

Updated: 16 November 2022 at 06.00