Accel leads $4 million investment in Egyptian corporate card platform Swypex

Image credits: Swipex

Cards are popular in Egypt, with over 30 million cards in circulation (prepaid cards in particular are used more than debit and credit cards combined). The surge in card usage, which has increased by about 14% over the past four years, is mainly due to incentives introduced by fintech companies and banks, and is aimed at increasing the number of Egyptians who previously relied primarily on cash for transactions. attracting consumers.

The introduction of corporate cards tells a different story. Businesses of all sizes have been hesitant to adopt corporate cards due to limited access and lack of control over spending.

Traditionally, banks have been the primary providers of corporate cards nationwide. But now fintech companies are stepping in to drive adoption. Swypex, a fintech that provides corporate cards and management tools for businesses, has raised $4 million and plans to use the funds to expand its business and the technical capabilities of its platform.

Image credits: Swipex

According to the UNDP report, approximately 3.8 million businesses in Egypt face the challenges of a complex and rigid financial system. Like many businesses across Africa, these businesses use multiple disconnected methods to handle their finances, creating inefficiencies. Employee fraud is also a problem, with companies losing an average of 5% of their revenue annually to fraud stemming from cash transactions, such as asset misappropriation and financial misstatements.

Preparing for release

However, there are significant tailwinds from a regulatory perspective. For example, Egypt’s apex bank, the Central Bank of Egypt (CBE), has launched initiatives such as the Instant Payment Network (IPN) to reduce cash-based transactions and promote digital payments.

Several Egyptian fintech companies, including Swypex, are leveraging such initiatives to launch necessary financial services while adhering to the central bank’s guidelines. CEO Ahmad Mokhtar said that although the startup was founded in early 2022, it has just come out of stealth mode and will spend the first year acquiring the required licenses, ensuring regulatory compliance, working with payment processors and banks. He explained that he was focused on cooperating with sponsors. Swypex then rolled out the beta version to his 100 customers last December.

“We spoke to hundreds of different companies, from startups to small businesses to large corporations to publicly traded companies, to understand what the challenges are at different stages,” Tarek said.・Mr. Mokhtar, who launched the startup together with Mr. Mokhtar (CPO) and Mr. Sasan, said. Hezarkhani (CTO) on the problems Swypex is tackling. “We have seen in the past 10 to 20 years where businesses have lost visibility of their money by primarily using cash, or have had to visit banks because they are using banking services that are a bit outdated. We realized that there were unique pains shared that had not been resolved over the years. There are a lot of physical documents and papers to sign in order to move business forward.”

All-in-one financial management platform

Moctar said Swypex offers companies “unlimited” corporate cards for their employees. The platform allows these businesses to set smart controls to manage their spending, such as setting various limits and specifying permissions for ATM withdrawals and online transactions. . After a transaction, employees can upload receipts, invoices, and expenditure details, which are integrated into a central dashboard with consolidated data from the government’s e-invoicing platform. In addition to ERP and accounting software integration, Swypex provides businesses with a streamlined and comprehensive overview of all their expenses and expenses in one place.

“Companies using our platform can see analytics on the distribution of spend across departments, merchants, individuals, and category levels,” said Tarek Mokhtar, chief product officer at the company. “You can categorize your spending and get detailed insights.” This enables businesses to make more data-driven decisions based on the real-time visibility we provide. ”

Swypex’s competitors in the corporate cards space across Africa also include YC-backed companies such as Boya and Bujeti. In Egypt, these are banks such as HSBC and National Bank. Mokhtar argues that Swypex is a better option for businesses because it allows for customization of its services and offers a wider range of features and services, such as unlimited card issuance and advanced management. “The focus on user experience, instant control of cards such as card blocking, and the incorporation of automation features is fundamentally new to the market,” the CEO said.

The two-year-old all-in-one financial management platform offers businesses the first three cards for free and generates revenue from interchange fees, float, and exchange markups.

Will the number of corporate cards increase rapidly in the next few years?

Accel is the storied venture capital firm that made its first investment in the MENA region (along with its backing of an African money transfer app) and led Swypex’s $4 million seed round. Investors who participated in this round included Foundation Ventures, The Raba Partnership, and other angel investors.

This is important for startups just emerging a few months out of beta, especially in a difficult funding environment where traction and revenue are priorities. But there’s a good reason why it attracted investment even before its official launch. Swypex has the potential to address a sizeable market (targeting a portion of the cards and payments market worth over $10 billion and expected to grow at a CAGR of 10% over the next three years) Mokhtar He also highlighted the founder’s background in building large-scale products for global companies such as Twitter, PlayStation, and Spotify.

“As the payments sector becomes increasingly digital, the opportunity to offer Egyptian businesses the latest fintech products becomes even more important,” Richard Kotaite, vice president of Accel, said in a statement. “Ahmad, Tarek and Sasan identified a gap in the market for a comprehensive B2B solution that addresses many of the key pain points that businesses face on a regular basis while driving significant changes in efficiency. We believe there is a real opportunity for Swypex to become a fintech champion across the Middle East.The team is technically experienced and highly ambitious, and we are excited to be part of this journey. I’m happy.”