Egypt’s Nexta raises $3 million for its challenger fintech app
Egypt’s Nexta raises $3 million for its challenger fintech app
Dunya Hassanein
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Egypt has a population of over 103 million inhabitants, growing at about 2 percent a year. The massive growth in population has created a fast-growing retail market, with $250 billion in consumer spending to gain. In recent years, we have seen a clear increase in digital payments, but it is estimated that only 4 percent of consumption is cashless.
Local fintech startups have increasingly been looking to fill gaps in financial services and increase investment in the consumer space, enabling larger segments of society and those outside the formal banking system to gain better access to financial products and cultivate better financial management habits .
“The demographics of the Middle East and North Africa region (Mena) offer a huge opportunity for fintech startups like ours. We’re talking about more than 60 percent of the population being under 30, compared to a third in Europe. The population is also extremely tech-savvy and always ready to embrace new technologies. Egypt is no exception, given that 50 percent of the population is unbanked, with users not getting real value for money because the traditional banking process is time-consuming, labor-intensive, and complex. Hence Egypt is an attractive market for Nexta,” says Ahmed Hisham, CEO of Nexta.
Nexta bills itself as a lifestyle banking app. Fintech provides users with prepaid cards, allowing them to transfer payments to each other without having to open a bank account while allowing them to track their spending habits and perform better budgeting.
“Considering the increase in demand for a change in the way financial services are used, there are a large number of consumer needs that should be addressed. This is where Nexta steps in with its mission, which is to provide digitally native services that help users keep pace with their lifestyles and enable citizens of all backgrounds to achieve financial freedom, he adds.
Nexta announced that it has raised $3 million in investment from digital financial services provider e-finance, bringing the total amount raised to $5.2 million since its inception last year. In March this year, Nexta also raised a pre-Seed round of $2.2 million led by Egypt-based fintech fund Disruptech, with participation from global investors. The newly acquired funds are expected to “clear the way for the official launch”, which is expected to take place in the next few weeks.
The announcement came a week after rival Telda app announced its official launch after securing a digital license from the Central Bank of Egypt (CBE) as well as completing a $20 million Seed funding round. The nascent digital banking space in the country also boasts Klivvr, a subsidiary of Orascom Financial Holding (OFH).
The three apps are each anchored by banks that have acquired a bank agent license, recently issued by the CBE.
