Technology
Paymob, Founded by Three College Friends, Earns Another $22 Million, Is Profitable in Egypt
Few ecosystems outside of Silicon Valley can boast successful tech startups founded by founders who were still in school or who recently dropped out of faculty, so when these events occur in regions just like the Middle East or Africa, it’s value listening to these firms.
A decade ago, Islam Shawky, Alaina El HajjAND Mostafa Menessythree students from the American University in Cairo, launched an e-commerce platform in Egypt. At the time, e-commerce was a booming industry, with only 2% of households in the country participating in it. One of the major reasons was the shortage of online payment methods.
“There was a gap between what banks were offering and the requirements of new business models from financial technology. No one was doing digital payments for e-commerce and digital startups,” Shawky said in Interview 2022.
Integrating the local banks’ payment gateway with the e-commerce platform was a pain, so Shawky and his friends launched Cry as a payment infrastructure for digital wallets in 2015 while still in college. What began as a small enterprise quickly grew into an omni-channel gateway offering over 50 payment methods, including wallets, cards, buy now, pay later (BNPL), and QR code payments, enabling over 350,000 merchants in five countries in the Middle East and North Africa to just accept online and offline payments.
To date, Paymob, which describes itself as a financial services enabler, has raised greater than $90 million to scale thus far, including a recently closed $22 million Series B round led by EBRD Venture Capital. This brings its total Series B funding to $72 million.
Cross-selling services for a growing seller base
When we last covered Paymob in 2022, the fintech was serving just over 100,000 local and international merchants, a number that had greater than tripled in two years after expanding from Egypt and Pakistan to Oman, Saudi Arabia, and the United Arab Emirates.
Paymob’s initial $50 million Series B round in 2022, co-led by PayPal Ventures, which participated in the expansion round, spurred that expansion. During that point, the fintech also beefed up its product suite, CEO Shawky told TechCrunch. It launched an app for small and medium-sized businesses (SMBs) and introduced payment methods like embedded checkout experiences and products like loans and advanced settlements.
“We help merchants accept, pay, manage and grow, those are the four divisions we have. Acceptance is the engine and the core business, and we sell everything around that,” Shawky explains. “Once merchants are onboarded, we help them accept digital transactions, and then step by step we help with payments, provide working capital and give them the tools to better manage their finances and their business.”
Paymob became profitable for the primary time in Egypt in the second quarter of this 12 months, where its revenue has increased six-fold since mid-2022. It stays unprofitable elsewhere.
Increasing the variety of merchants and increasing average revenue per merchant by cross-selling additional services has been a giant a part of the startup’s success. For example, if a Paymob customer only has a POS terminal that accepts cards, that only accounts for 10-15% of their business. By offering a collection of products through partnerships with Shopify and Tabby, Paymob’s margins have improved significantly. Doing this at scale, digitally, and without the necessity for an enormous sales force has likely fueled the startup’s effective growth (Paymob has just over 1,000 employees).
“What’s most gratifying for us is that we’ve been able to grow profitably, because over the last two years, a lot of people have said we have to stop growing to be profitable or to preserve our runway,” Shawky noted. “But we’ve shown that if you build a fundamentally sound business and you really address customer needs, you can scale quickly and still be profitable.”
Rapid adoption of online payments in the UAE
Indeed, in Egypt and the Gulf countries there’s a dynamic growth in the recognition of digital payments.
In Egypt, 88% of consumers have used not less than one recent payment method in the past 12 months, and 85% of SMEs recognize that accepting multi-channel digital payments is vital to their growth, in response to Mastercard. Meanwhile, in the United Arab Emirates, demand for digital payment methods is more pronounced, with around 77% adoption nationwide.
Based on conversations with founders, it’s clear that despite such strong demand, the market stays underserved. As such, fintech firms which have expanded into the UAE, reminiscent of Paymob and native players like Ziina, which we wrote about last week, are racing to fill the gap by offering tailored solutions to half 1,000,000 merchants, capitalizing on the country’s growing appetite for digital payments.
As an illustration of this explosion in demand, Paymob only offers a web based payment acceptance product in the UAE, yet in just 14 months, its transaction volume in the UAE has grown to the dimensions of Egypt’s entire business, which took five years to construct. Reasons for this rapid growth in the Middle Eastern country include higher purchasing power, currency strength, and a greater share of digital wallets versus money.
Nevertheless, Egypt stays its largest market. Shawky is confident that a collection of fintech products geared toward promoting a cashless society, combined with efforts by the federal government and the central bank, will help Egypt achieve the identical level of digital payments adoption seen in the UAE.
“Issuance and acceptance need to go hand in hand for Egypt’s economy to reach this turning point. The central bank is putting a lot of effort and investment into the country’s digital infrastructure,” the CEO noted. “We are seeing the results. Our business has grown six-fold in two years and four months; yes, we have increased our merchant base, but it is also because these merchants are processing more digital volumes.”
Paymob reported $5 billion in total payments in 2020 and facilitated greater than 120 million transactions that 12 months. However, the present numbers for each metrics remain unclear because the fintech has not disclosed updated numbers.
In addition to PayPal Ventures, the fintech’s Series B funding round included Endeavor Catalyst, in addition to existing investors: British International Investment (BII), FMO, A15, Nclude, and Helios Digital Ventures (HDV).
Technology
Google is introducing ads to AI reviews, expanding AI’s role in search
Google will start showing ads in AI reviews, that are the AI-generated summaries it provides for certain Google Search queries, and will even add links to relevant web sites for a few of those summaries. AI-organized search results pages will even be available in the US this week.
The growing importance of artificial intelligence in Google’s core search engine is aimed toward keeping users from switching to alternatives comparable to ChatGPT or OpenAI’s Perplexity, which use artificial intelligence to answer lots of the questions traditionally asked to Google. Embarrassment he said in May that its worldwide user base had grown to over 85 million web visits, a drop in the bucket compared to Google, but impressive considering Perplexity launched just two years ago.
Since its launch this spring, AI Reviews has been the topic of much controversy, with its dubious claims and dubious advice (like adding glue to pizza) gaining huge popularity online. Recent report from the search engine marketing platform SE Ranking found that AI Reviews cites sites which might be “not completely trustworthy or evidence-based,” including outdated research and paid product listings.
The major problem is that AI Reviews sometimes has difficulty distinguishing whether a source of knowledge is fact or fiction, satire or serious matter. Over the past few months, Google has made changes to how AI Reviews work, including limiting responses related to current events and health topics. But the corporate doesn’t claim it’s perfect.
“We will invest in AI reviews to make them even more useful,” Rhiannon Bell, vice chairman of user experience at Google Search, said at a press conference. “We do everything we can to provide our users with relevant content.”
Separately, Google says AI Reviews has led to a rise in Google Search engagement, especially amongst 18- to 24-year-olds – a key demographic for the corporate.
Now Google is taking steps to monetize this feature by adding ads.
US mobile device users will soon see ads in AI Reviews with “relevant queries” comparable to how to remove grass stains from jeans. Ads labeled “Sponsored” will appear alongside other unsponsored content in AI summaries and can be pulled from advertisers’ existing campaigns on Shopping and the Google Search network.
AI Reviews ads have been available to select users for a while, and according to internal Google data, they’ve been well received.
“People have found AI advertising useful because it allows them to quickly connect with the right companies, products and services to take the next step exactly when they need it,” Shashi Thakur, vice chairman of Google Ads, wrote in a blog post shared with TechCrunch .
But ads also litter AI summaries. One of the formats, the carousel of sponsored product results, is embedded directly in AI summaries and placed in such a way that unsponsored content is pushed to the screen.
The recent look of AI Reviews that appears alongside ads adds highlighted links to web sites that could be relevant. For example, when you search “Do air filters protect your lungs?” AI Reviews may link to a study on air filters conducted by the American Lung Association.
The redesign was tested for several months and is currently being rolled out in regions where AI Overviews were already available, including India, Brazil, Japan, Mexico, the US and the UK
Finally, this week in the US, a separate product will debut on mobile devices – search results pages organized by artificial intelligence. Searches for recipes and meal inspiration – like “What are some good vegetarian snacks or dinner ideas that make an impression?” – can display an AI-aggregated page of content from across the web, including forums, articles and YouTube videos.
However, they are going to not include AI Reviews ad formats.
“The customized Gemini (model) generates an entire page of relevant and structured results,” Bell explained, referring to Google’s Gemini family of artificial intelligence models. “With AI-organized results pages, we are serving more diverse content formats from a more diverse set of content.”
Google says it plans to expand these pages to other search categories in the approaching months.
Publishers may suffer collateral damage.
One study found that AI reviews can negatively impacting roughly 25% of publisher traffic due to the reduced emphasis on website links. On the revenue side, an authority quoted by The New York Post estimated that AI-generated reviews could result in publisher losses of greater than $2 billion due to the resulting decline in ad impressions.
AI-generated search results from Google and competitors don’t yet appear to block traffic from large publishers. In their latest earnings, Ziff Davis and Dotdash Meredith – IAC parents characterised effects as negligible.
But which will change because Google which commands over 81% of the worldwide search market, expands AI overviews and AI organized pages for more users and queries. According to one estimateAI overviews only showed up for about 7% of searches in July, as Google re-targeted the feature to make changes.
Google says it continues to take publishers’ concerns under consideration during its AI-powered search workshops.
Technology
Google Maps will display AI-powered review summaries in India
Google is adding latest AI-powered features to Maps in India, including AI-powered summaries, the power to go looking for attractions, and weather alerts.
The Maps app will analyze reviews and display place summaries, he added. The company announced this on Thursday at Google’s annual India event.
Additionally, users will find a way to go looking Maps for items and attractions, corresponding to asking for “unique picnic spots” or “themed birthday cakes,” to search out cake vendors.
When people ask such questions, Google Maps will display images first, which will prioritize photos uploaded by businesses and users, the corporate says.
Google uses image recognition to associate labels or descriptions of places with such queries.
The company also said that while navigating, users will see latest weather alerts for areas with poor visibility because of fog and flooded roads.
The suite of latest features will be rolled out to users in India later this month. AI-powered review summaries debuted on Maps in the US in February. Google competitor Yelp also displays business summaries on its revamped feed in the USA
In July, Google added quite a few India-specific features to Google Maps, including higher navigation directions, higher navigation on overpasses and narrow roads, electric vehicle charging stations, and community-generated lists to find places in chosen cities.
Technology
Judge blocks new California artificial intelligence law over Kamala Harris deepfake
A federal judge on Wednesday blocked considered one of California’s new artificial intelligence laws, lower than two weeks after Gov. Gavin Newsom signed it. Shortly after AB 2839 was signed into law, Newsom suggested it is likely to be something we would get used to force Elon Musk to take down Vice President Kamala Harris’s fake AI that he reposted (invoking a little web battle between them). But a California judge just ruled that the state cannot force people to remove fraudulent elections — not less than not yet.
AB 2839 targets distributors of faux AI content on social media, especially if their post resembles a politician and the sender knows it’s fake and will confuse voters. The law is exclusive in that it doesn’t goal the platforms where AI deepfakes appear, but relatively those that spread them. AB 2839 empowers California judges to order posters depicting AI deepfakes to be removed or face fines.
Perhaps unsurprisingly, the unique poster of this AI deepfake – an X user named Christopher Kohls – filed a lawsuit to dam the new California law as unconstitutional only a day after it was signed into law. Kohls’ lawyer wrote in: criticism that Kamala Harris’s hoax is satire that must be protected by the First Amendment.
On Wednesday, U.S. District Judge John Mendez sided with Kohls. Mendez ordered a preliminary injunction to dam the California attorney general from enforcing the new law against Kohls or anyone else, aside from the audio messages covered by AB 2839.
Read for yourself what Judge Mendez said his decision: :
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In essence, he ruled that the law was just too broad as written and will end in serious overreach by state authorities about what’s and will not be permitted.
Since it is a preliminary injunction, we’ll should wait and see if this California law is definitely blocked permanently, but either way it’s unlikely to have a significant impact on next month’s elections. AB 2839 is considered one of 18 new artificial intelligence bills that Newsom signed into law last month.
Nevertheless, it is a major victory for Elon Musk’s camp of free speech posters on X. In the times after Newsom signed AB 2839, Musk and his usual allies released AI deepfakes series who tested California’s new law.
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