Connect with us

Technology

Paymob, Founded by Three College Friends, Earns Another $22 Million, Is Profitable in Egypt

Published

on

Paymob, started by three college friends, lands another $22 million and 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).

This article was originally published on : techcrunch.com
Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Technology

Introducing the Next Wave of Startup Battlefield Judges at TechCrunch Disrupt 2024

Published

on

By

Announcing our next wave of Startup Battlefield judges at TechCrunch Disrupt 2024

Startup Battlefield 200 is the highlight of every Disrupt, and we will’t wait to search out out which of the 1000’s of startups which have invited us to collaborate can have the probability to pitch to top enterprise capitalists at TechCrunch Disrupt 2024. Join us at Moscone West in San Francisco October 28–30 for an epic showdown where everyone can have the probability to make a major impact.

Get insight into what the judges are in search of in a profitable company as they supply detailed feedback on the evaluation criteria. Don’t miss the opportunity to learn from their expert insights and discover the key characteristics that result in startup success, only at Disrupt 2024.

We’re excited to introduce our next group of investors who will evaluate startups and dive into each pitch in an in-depth and insightful Q&A session. Stay tuned for more big names coming soon!

Alice Brooks, Partner, Khosla Ventures

Alicja is a partner in Khosla’s ventures interests in sustainability, food, agriculture, and manufacturing/supply chain. She has worked with multiple startups in robotics, IoT, retail, consumer goods, and STEM education, and led mechanical, electrical, and application development teams in the US and Asia. She also founded and managed manufacturing operations in factories in China and Taiwan. Prior to KV, Alice was the founder and CEO of Roominate, a STEM education company that helps girls learn engineering concepts through play.

Mark Crane, Partner, General Catalyst

Mark Crane is a partner at General Catalysta enterprise capital firm that works with founders from seed to endurance to assist them construct corporations that may stand the test of time. Focused on acquiring and investing in later-stage investment opportunities equivalent to AuthZed, Bugcrowd, Resilience, and TravelPerk. Prior to joining General Catalyst, Mark was a vice chairman at Cove Hill Partners in Massachusetts. Prior to that, he was a senior associate at JMI Equity and an associate at North Bridge Growth Equity.

Sofia Dolfe, Partner, Index Ventures

Sofia partners with founders who use their unique perspective and private understanding of the problem to construct corporations that drive behavioral change, powerful network effects, and transform entire industries, from grocery and e-commerce to financial services and healthcare. Sofia can also be one of Index projects‘ gaming leads, working with some of the best gaming corporations in Europe, making a recent generation of iconic gaming titles. He spends most of his time in the Nordics, but works with entrepreneurs across the continent.

Christine Esserman, Partner, Accel

Christine Esserman joined Acceleration in 2017 and focuses on software, web, and mobile technology corporations. Since joining Accel, Christine has helped lead Accel’s investments in Blackpoint Cyber, Linear, Merge, ThreeFlow, Bumble, Remote, Dovetail, Ethos, Guru, and Headway. Prior to joining Accel, Christine worked in product and operations roles at multiple startups. A native of the Bay Area, Christine graduated from the Wharton School at the University of Pennsylvania with a level in Finance and Operations.

Haomiao Huang, Founding Partner, Matter Venture Partners

Haomiao from Venture Matter Partners is a robotics researcher turned founder turned investor. He is especially obsessed with corporations that bring digital innovation to physical economy enterprises, with a give attention to sectors equivalent to logistics, manufacturing and transportation, and advanced technologies equivalent to robotics and AI. Haomiao spent 4 years investing in hard tech with Wen Hsieh at Kleiner Perkins. He previously founded smart home security startup Kuna, built autonomous cars at Caltech and, as part of his PhD research at Stanford, pioneered the aerodynamics and control of multi-rotor unmanned aerial vehicles. Kuna was part of the Y Combinator Winter 14 cohort.

Don’t miss it!

The Startup Battlefield winner, who will walk away with a $100,000 money prize, can be announced at Disrupt 2024—the epicenter of startups. Join 10,000 attendees to witness this breakthrough moment and see the next wave of tech innovation.

Register here and secure your spot to witness this epic battle of startups.

This article was originally published on : techcrunch.com
Continue Reading

Technology

India Considers Easing Market Share Caps for UPI Payments Operators

Published

on

By

phonepe UPI being used to accept payments at a road-side sunglasses stall.

The regulator that oversees India’s popular UPI rail payments is considering relaxing a proposed market share cap for operators like Google Pay, PhonePe and Paytm because it grapples with enforcing the restrictions, two people accustomed to the matter told TechCrunch.

The National Payments Corporation of India (NPCI), which is regulated by the Indian central bank, is considering increasing the market share that UPI operators can hold to greater than 40%, said two of the people, requesting anonymity because the knowledge is confidential. The regulator had earlier proposed a 30% market share limit to encourage competition within the space.

UPI has change into the most well-liked option to send and receive money in India, with the mechanism processing over 12 billion transactions monthly. Walmart-backed PhonePe has about 48% market share by volume and 50% by value, while Google Pay has 37.3% share by volume.

Once an industry heavyweight, Paytm’s market share has fallen to 7.2% from 11% late last yr amid regulatory challenges.

According to several industry executives, the NPCI’s increase in market share limits is more likely to be a controversial move as many UPI providers were counting on regulatory motion to curb the dominance of PhonePe and Google Pay.

NPCI, which has previously declined to comment on market share, didn’t reply to a request for comment on Thursday.

The regulator originally planned to implement the market share caps in January 2021 but prolonged the deadline to January 1, 2025. The regulator has struggled to seek out a workable option to implement its proposed market share caps.

The stakes are high, especially for PhonePe, India’s Most worthy fintech startup, valued at $12 billion.

Sameer Nigam, co-founder and CEO of PhonePe, said last month that the startup cannot go public “if there is uncertainty on regulatory issues.”

“If you buy a share at Rs 100 and value it assuming we have 48-49% market share, there is uncertainty whether it will come down to 30% and when,” Nigam told a fintech conference last month. “We are reaching out to them (the regulator) whether they can find another way to at least address any concerns they have or tell us what the list of concerns is,” he added.

This article was originally published on : techcrunch.com
Continue Reading

Technology

Bluesky addresses trust and security issues related to abuse, spam and more

Published

on

By

Bluesky butterfly logo and Jay Graber

Social media startup Bluesky, which is constructing a decentralized alternative to X (formerly Twitter), provided an update Wednesday on the way it’s approaching various trust and security issues on its platform. The company is in various stages of developing and piloting a variety of initiatives focused on coping with bad actors, harassment, spam, fake accounts, video security and more.

To address malicious users or those that harass others, Bluesky says it’s developing recent tools that can have the option to detect when multiple recent accounts are created and managed by the identical person. This could help curb harassment when a foul actor creates several different personas to attack their victims.

Another recent experiment will help detect “rude” replies and forward them to server moderators. Like Mastodon, Bluesky will support a network where self-hosters and other developers can run their very own servers that connect to Bluesky’s server and others on the network. This federation capability is still in early access. But in the long term, server moderators will have the option to resolve how they need to take care of individuals who post rude responses. In the meantime, Bluesky will eventually reduce the visibility of those responses on its app. Repeated rude labels on content will even lead to account-level labels and suspensions, it says.

To curb using lists to harass others, Bluesky will remove individual users from the list in the event that they block the list creator. Similar functionality was recently introduced to Starter Packs, a sort of shared list that will help recent users find people to follow on the platform (check TechCrunch Starter Pack).

Bluesky will even scan lists with offensive names or descriptions to limit the potential of harassing others by adding them to a public list with a toxic or offensive name or description. Those who violate Bluesky’s Community Guidelines might be hidden from the app until the list owner makes changes that align with Bluesky’s policies. Users who proceed to create offensive lists will even face further motion, though the corporate didn’t provide details, adding that the lists are still an area of ​​energetic discussion and development.

In the approaching months, Bluesky also intends to move to handling moderation reports through its app, using notifications relatively than counting on email reports.

To combat spam and other fake accounts, Bluesky is launching a pilot that can attempt to routinely detect when an account is fake, scamming or sending spam to users. Combined with moderation, the goal is to have the option to take motion on accounts inside “seconds of receiving a report,” the corporate said.

One of the more interesting developments is how Bluesky will comply with local laws while still allowing free speech. It will use geotags that allow it to hide some content from users in a particular area to comply with the law.

“This allows Bluesky’s moderation service to maintain flexibility in creating spaces for free expression while also ensuring legal compliance so that Bluesky can continue to operate as a service in these geographic regions,” the corporate shared in a blog post. “This feature will be rolled out on a country-by-country basis, and we will endeavor to inform users of the source of legal requests when legally possible.”

To address potential trust and safety issues with videos which have recently been added, the team is adding features like the flexibility to disable autoplay, ensuring videos are labeled, and providing the flexibility to report videos. They are still evaluating what else might need to be added, which might be prioritized based on user feedback.

When it comes to abuse, the corporate says its general framework is “a question of how often something happens versus how harmful it is.” The company focuses on addressing high-impact, high-frequency issues, in addition to “tracking edge cases that could result in significant harm to a few users.” The latter, while only affecting a small number of individuals, causes enough “ongoing harm” that Bluesky will take motion to prevent abuse, it says.

User concerns will be reported via reports, emails and mentions @safety.bsky.app account.

This article was originally published on : techcrunch.com
Continue Reading
Advertisement

OUR NEWSLETTER

Subscribe Us To Receive Our Latest News Directly In Your Inbox!

We don’t spam! Read our privacy policy for more info.

Trending