Dubai-headquartered fintech FlexxPay has raised $3 million in a pre-Series A round comprised of equity debt, it announced today. The investors include JIMCO (Jameel Investment Management Company), European VC Target Global, Wamda, DIFC FinTech Fund, March Holding, Arzan VC, Saudi’s Sukna Ventures, Nuwa Capital, and VentureSouq.
A part of this round was announced in December 2019. It looks like they’ve now closed the Pre-Series A, taking their total funding to date to $4.5 million. Its seed round of $1.5 million was closed in July 2019. The latest funds will be used to further enhance its platform and grow its client base.
FlexxPay had started in 2018 by offering its services to employers in the United Arab Emirates but later also expanded to Saudi and now plans to launch its platform in Bahrain as well. It partners with corporates to enable their employees to access a portion of their already earned salaries, commissions, pensions, and end of service benefits, through its online platform.
“Companies benefit largely from increased employee motivation and productivity while they see a significant decrease of reported sick leaves due to reduced financial stress on employees. HR departments’ workload is reduced by around 20% by eliminating time spent processing salary advance requests,” noted its statement.
It doesn’t charge any interest and claims that its solutions are Shari’a compliant. The startup makes money by charging the employees a small transaction fee to use the service. The corporates don’t pay anything for using it and the advances are paid by FlexxPay so there’s no impact on the cash flow of employers. The statement by FlexxPay did not share any numbers but said that its services are used by clients from different industries including telecom, retail, logistics, financial services, and real estate.
Michael Truschler, co-founder and CEO of FlexxPay said, “The continued support of our existing investors and the addition of new investors is invaluable to FlexxPay’s growth and evolution. We are solving a real-world problem for employers and their employees. Financial stress directly impacts the bottom line of a company’s P&L and is one of the main factors for employees being less productive and reporting sick. Giving people access to what they have already earned is just the right thing to do. They’ve earned it, they deserve it.”
Khaled Talhouni, Managing Partner at Nuwa Capital said, “We invested in FlexxPay to back an exceptional team with a strong background of building a business in the past and has developed a very scalable solution that benefits both, the companies and the employees.”
The similar platforms operating in the United States and Europe have raised hundreds of millions of dollars in VC so it is a somewhat validated model. NowPay, Khazna, and Finja also offer similar services to corporates and their employees in Egypt and Pakistan.