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
The Rise and Fall of the “Scattered Spider” Hackers.
After greater than two years of evading capture following a hacking spree that targeted some of the world’s largest technology firms, U.S. authorities say they’ve finally caught a minimum of some of the hackers responsible.
In August 2022 security researchers made their information public with a warning that a bunch of hackers targeted greater than 130 organizations in a complicated phishing campaign that stole the credentials of nearly 10,000 employees. The hackers specifically targeted firms that use Okta, a single sign-on service provider that hundreds of firms around the world use to permit their employees to log in from home.
Due to its give attention to Okta, the hacker group was dubbed “0ktapus”. By now the group has been hacked Caesar’s entertainmentCoinbase, DoorDash, Mailchimp, Riot Games, Twilio (twice) and dozens more.
The most notable and severe cyber attack by hackers in terms of downtime and impact was the September 2023 breach of MGM Resorts, which reportedly cost the casino and hotel giant a minimum of $100 million. In this case, the hackers collaborated with the Russian-speaking ransomware gang ALPHV and demanded a ransom from MGM for the company to get better its files. The break-in was such a nuisance that MGM-owned casinos had problems with service delivery for several days.
Over the past two years, as law enforcement has closed in on hackers, people in the cybersecurity industry have been attempting to work out exactly tips on how to classify hackers and whether to place them in a single group or one other.
Techniques utilized by hackers similar to social engineering, email and SMS phishing, and SIM swapping are common and widespread. Some of the individual hackers were part of several groups chargeable for various data breaches. These circumstances make it obscure exactly who belongs to which group. Cybersecurity giant CrowdStrike has dubbed this hacker group “Scattered Spider,” and researchers imagine it has some overlap with 0ktapus.
The group was so energetic and successful that the US cybersecurity agency CISA and the FBI issued a advice in late 2023 with detailed details about the group’s activities and techniques in an try and help organizations prepare for and defend against anticipated attacks.
Scattered Spider is a “cybercriminal group targeting large companies and their IT helpdesks,” CISA said in its advisory. The agency warned that the group “typically engaged in data theft for extortion purposes” and noted its known ties to ransomware gangs.
One thing that is comparatively certain is that hackers mostly speak English and are generally believed to be teenagers or early 20s, and are sometimes called “advanced, persistent teenagers.”
“A disproportionate number of minors are involved and this is because the group deliberately recruits minors due to the lenient legal environment in which these minors live, and they know that nothing will happen to them if the police catch the child” – Allison Nixon , director of research for Unit 221B, told TechCrunch at the time.
Over the past two years, some members of 0ktapus and Scattered Spider have been linked to a similarly nebulous group of cybercriminals generally known as “Com” People inside this broader cybercriminal community committed crimes that leaked into the real world. Some of them are chargeable for acts of violence similar to robberies, burglaries and bricklaying – hiring thugs to throw bricks at someone’s house or apartment; and swatting – when someone tricks authorities into believing that a violent crime has occurred, prompting the intervention of an armed police unit. Although born as a joke, the swat has fatal consequences.
After two years of hacking, authorities are finally starting to discover and prosecute Scattered Spider members.
in July This was confirmed by the British police arrest of a 17-year-old in reference to the MGM burglary.
In November, the U.S. Department of Justice announced it had indicted five hackers: Ahmed Hossam Eldin Elbadawy, 23, of College Station, Texas; Noah Michael Urban, 20, from Palm Coast, Florida, arrested in January; Evans Onyeaka Osiebo, 20, of Dallas, Texas; Joel Martin Evans, 25, of Jacksonville, North Carolina; and Tyler Robert Buchanan, 22, from the UK, who was arrested in June in Spain.
Technology
OpenAI accidentally deleted potential evidence in NY Times copyright lawsuit (update)
Lawyers for The New York Times and Daily News, who’re suing OpenAI for allegedly copying their work to coach artificial intelligence models without permission, say OpenAI engineers accidentally deleted potentially relevant data.
Earlier this fall, OpenAI agreed to offer two virtual machines in order that advisors to The Times and Daily News could seek for copyrighted content in their AI training kits. (Virtual machines are software-based computers that exist inside one other computer’s operating system and are sometimes used for testing purposes, backing up data, and running applications.) letterlawyers for the publishers say they and the experts they hired have spent greater than 150 hours since November 1 combing through OpenAI training data.
However, on November 14, OpenAI engineers deleted all publisher search data stored on one among the virtual machines, in keeping with the above-mentioned letter, which was filed late Wednesday in the U.S. District Court for the Southern District of New York.
OpenAI tried to get better the information – and was mostly successful. However, since the folder structure and filenames were “irretrievably” lost, the recovered data “cannot be used to determine where the news authors’ copied articles were used to build the (OpenAI) models,” the letter says.
“The news plaintiffs were forced to recreate their work from scratch, using significant man-hours and computer processing time,” lawyers for The Times and the Daily News wrote. “The plaintiffs of the news learned only yesterday that the recovered data was useless and that the work of experts and lawyers, which took a whole week, had to be repeated, which is why this supplementary letter is being filed today.”
The plaintiffs’ attorney explains that they don’t have any reason to consider the removal was intentional. However, they are saying the incident highlights that OpenAI “is in the best position to search its own datasets” for potentially infringing content using its own tools.
An OpenAI spokesman declined to make an announcement.
However, late Friday, November 22, OpenAI’s lawyer filed a motion answer to a letter sent Wednesday by attorneys to The Times and Daily News. In their response, OpenAI’s lawyers unequivocally denied that OpenAI had deleted any evidence and as a substitute suggested that the plaintiffs were guilty for a system misconfiguration that led to the technical problem.
“Plaintiffs requested that one of several machines provided by OpenAI be reconfigured to search training datasets,” OpenAI’s attorney wrote. “Implementation of plaintiffs’ requested change, however, resulted in the deletion of the folder structure and certain file names from one hard drive – a drive that was intended to serve as a temporary cache… In any event, there is no reason to believe that any files were actually lost.”
In this and other cases, OpenAI maintains that training models using publicly available data – including articles from The Times and Daily News – are permissible. In other words, by creating models like GPT-4o that “learn” from billions of examples of e-books, essays, and other materials to generate human-sounding text, OpenAI believes there isn’t a licensing or other payment required for examples – even when he makes money from these models.
With this in mind, OpenAI has signed licensing agreements with a growing number of recent publishers, including the Associated Press, Business Insider owner Axel Springer, the Financial Times, People’s parent company Dotdash Meredith and News Corp. OpenAI declined to offer the terms of those agreements. offers are public, but one among its content partners, Dotdash, is apparently earns at the least $16 million a 12 months.
OpenAI has not confirmed or denied that it has trained its AI systems on any copyrighted works without permission.
Technology
Sequoia increases its 2020 fund by 25%
Sequoia says no going out, no problem.
According to data from the Silicon Valley enterprise capital giant, the worth of its Sequoia Capital US Venture XVII fund increased by 24.6% in June at the top of 12 months. Pitchbookwho analyzed data from the University of California Regents Fund.
Sequoia’s margin is notable since the fund hasn’t had any exits yet. This can be a positive development for the 2020 fund vintage, on condition that after the uncertain valuations of 2020 and 2021, this yr’s funds usually are not expected to perform well for any VC. The mismatch is probably going resulting from high AI valuations giving risks a way of an economic recovery that has yet to bear fruit in other sectors. Sequoia is an investor in high-growth artificial intelligence corporations including OpenAI, Glean and Harvey, amongst others.
Sequoia has raised over $800 million for Fund XVII, which closed in 2022.
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