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Egypt’s Khazna banks $16M for its financial super app and expansion into Saudi

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5 hours ago

February 4, 2025

Egypt’s Khazna banks $16M for its financial super app and expansion into Saudi

Egypt faces a significant challenge with a large portion of its population lacking access to traditional banking services, leading many to rely on cash transactions and informal lending. To address this issue, fintech startup Khazna was founded in 2019, offering tailored financial solutions for low- and middle-income workers. These solutions include salary advances, digital payments, and microloans, providing essential financial services to employees and contractors.

Recently, Khazna secured $16 million in pre-Series B funding, bringing its total funding to over $63 million. This investment will support the company’s expansion plans, including applying for a digital banking license in Egypt and venturing into the Saudi Arabian market.

Since our coverage in 2022, Khazna has significantly grown its user base to over 500,000 individuals, with a focus on those earning three times less than Egypt’s minimum wage. The company offers affordable financial tools to this demographic, with about 100,000 users receiving their payroll through Khazna, enabling seamless integration of financial services like loans and insurance.

Khazna’s strategic approach includes payroll-backed credit and pension lending, which has contributed to the company’s recent break-even milestone. CEO Omar Saleh emphasized the importance of focusing on core products to achieve profitability.

On the path to becoming a digital bank

In addition to its core offerings, Khazna provides services like bill payments, buy now, pay later, medical insurance, and a rent-to-own product. By embedding itself in payroll and lending, the company aims to evolve into a full-fledged digital bank catering to underserved communities in Egypt.

To enhance its lending operations and reduce borrowing costs, Khazna is pursuing a deposit-taking license in Egypt. Access to customer deposits would enable the company to offer more affordable loans by lowering its cost of funds.

Khazna’s timeline includes securing a banking license from Egypt’s Central Bank by mid-2026, following the regulatory framework for digital banks established in July 2024.

Alongside its Egyptian expansion, Khazna is eyeing the Saudi Arabian market, leveraging the strong Egypt-Saudi remittance corridor. The company plans to offer cross-border financial services, including credit products and foreign exchange solutions, targeting the sizable Egyptian population in Saudi Arabia.

Expansion plans, including a not-so-imminent IPO

Khazna’s strategic focus on Saudi Arabia is driven by market size, product fit, and the robust capital markets in the region. The company aims to have a significant portion of its business coming from Saudi within the next four years, paving the way for a potential public listing on Tadawul.

The recent growth capital will fund Khazna’s expansion efforts, with a keen eye on the macroeconomic landscape. Despite challenges in Egypt’s economy in previous years, the company is poised for growth following increased foreign direct investment and renewed investor confidence.

New and existing investors, including global players like Quona and Speedinvest, as well as regional financial institutions, have shown support for Khazna’s vision. The company’s strategic approach and focus on core products have positioned it for sustainable growth and success in the fintech industry.