Masroofi, an Egyptian fintech startup providing digital payment services to children between the ages of 5 and 15, has secured $1.5 million in funding from unnamed investors. This amount will enable the startup to widen its reach in terms of service delivery.
Masroofi was able to attract investment thanks to a variety of reasons. Firstly, its innovative products target an underrepresented group: children. By choosing to focus on a category comprising 20 million children with vast monetary needs, the startup seized a lucrative market opportunity. Alongside this fact is the wealth of experience that the founders Mostafa Abdel-Khabeer and Sayed Hosni bring to the startup.
Before co-founding Masroofi in 2022, Abdel-Khabeer spent 16 years in the business sector. That coupled with Hosni’s 20 years of experience in the technology area seemed to impress the investors. Both were already popular in their respective fields. Since establishing Masroofi, both founders have maintained a healthy relationship and that also sent a positive signal to the investors.
Another likely reason is the founders’ decision to reject a funding offer of £16 million on the popular entrepreneurial reality show, Shark Tank. Doing this not only generated a buzz but it spotlighted Masroofi, thus attracting external investment. The Egyptian startup expects to build a network of 2 million children within five years. Its main areas of focus include Cairo, Giza, and Alexandra.
Masroofi offers several kid-focused financial services with a bank card system being among the popular products. When a parent opens an account on behalf of their children, they get three cards that utilize near-field communication technology to function. NFC-based cards interact with a card reader through a single tap.
To issue these cards, Masroofi collaborated with the Arab Bank. It also entered an agreement with digital payment service provider Visa. The startup’s mobile application not only acts as an electronic wallet but offers lessons on money management and other aspects of financial education.
Masroofi’s blend of technology with banking services echoes the Egyptian government’s latest digital transformation and financial inclusion plans. Already the North African nation currently houses several startups in the fintech sector, there are certain underserved areas like “remittances from Egyptians abroad, the Islamic economy, and the installment payment system.”
Last October, the Central Bank of Egypt unveiled a financial inclusion strategy scheduled to run from 2022 through 2025. The primary objective is to reduce the number of people unable to access essential financial services while promoting economic development. This roadmap is a major component of the country’s Vision 2030 which seeks to diversify the economy, among other things.
It’s worth adding that Egypt’s financial inclusion strategy looks to support the startup ecosystem by establishing a sustainable infrastructure for new and existing startups. Fintechs are crucial to the financial inclusion goals of many countries mainly because of their versatile service offerings that prioritize historically unrepresented consumers. (those living in rural communities for instance).
Another interesting fact about fintechs is that they offer consumers various channels to access their service offerings. These outlets include mobile apps, ATM cards, and agent banking (ideal for digitally illiterate people). According to the Central Bank of Egypt’s report, the country has a financial inclusion rate of 60% for men and 54.1% for women. Despite these figures, there’s great room for improvement and it’ll be interesting to see how fintechs and the government strive to close the gap.
Source: https://technext24.com/2023/07/06/egypt-fintech-masroofi-funding/