Cairo-based fintech NowPay has raised $2.1 million in a seed round co-led by Foundation Ventures and Endure Capital, with the participation of investors from the United States, United Arab Emirates, China, and Egypt, it announced in a statement to MENAbytes today.
Beco Capital, 500 Startups (MENA), Plug and Play, 4Dx Ventures, MSA Capital, EFG-EV Fintech, and Ebikar, also joined the round. Some angels including Quirky Ventures, Gehan Fathi and Rolaco also invested in the round. The investment brings NowPay’s total raise to date to $2.7 million. It had raised $600,000 (also in seed round) in 2019.
Founded by Mostafa Ashour and Ahmed Sabry, NowPay launched the financial wellness platform in 2019 to enable corporates to offer salary advances to their employees. They’ve recently also added Gehan Fathi, who previously worked as Managing Director at EFG (and joined this round as an angel) and Mahmoud ElHosseiny who managed Egypt sales for Fortune 500 company Stanley-Black Decker to their executive team.
The employees of companies that partner with NowPay can request their salary (or a part of it) at any time of the month through its mobile app.
The account has to be validated by the employer before it can be used to request advances. Once the account is approved, they can also see the details of their salary and how much are they eligible to request as advance. The mobile app also enables users to manage and track their savings, expenses, and offers them financial recommendations. NowPay’s website says that its solution is Shariah-compliant. For employers, it is free. The employees, however, are charged a fee every time they use it.
Mostafa Ashour, the co-founder and CEO of NowPay who previously led the innovation teams at Microsoft Research told MENAbytes that their solution is currently being used by over 70 entities which includes a mix of publicly listed companies, multinationals, and startups. Some of those companies are Domty, MNHD, Sodic, Axa, Trella, Elmenus, and Wuzzuf.
In a statement, Mostafa, said, “During the peak of Covid-19 lockdowns, we are proud to have well-known and eminent investors back us, signaling trust in our business concept and our team. Saving, spending, budgeting, and borrowing, are our four pillars of financial wellness. Financial stress plays a major role as a top distraction for employees. NowPay bridges that gap and provides several benefits for employers that choose to proactively address this area of employee wellness.”
“Within a very short period, we are delighted to have managed salaries in excess of US$100 million with a 60 percent month-over-month growth rate,” he added.
The solution offered by NowPay helps employers improve employee happiness, productivity, and corporate loyalty, without any changes in their cash flow as the money is offered by NowPay. For employers, it is pretty much business as usual. They are only supposed to deduct the advance amount and fee from the salary at the end of the month (or whenever they pay the salaries) and pay it to NowPay directly.
Ziyad Hamdy, Managing Partner at Foundation Ventures, a newly established Cairo-based VC, commenting on the investment, said, “There is an asymmetry between expenses and income, which puts a lot of stress on employee’s morale, and hampers productivity. We are thrilled to join NowPay’s incredible team on this journey of empowering employees with the happiness and wellness that financial stability provides.”
Tarek Fahim, Managing Partner at Endure Capital, said, “Not every day you have both clear product-market fit and founders market fit. That’s what they have at NowPay. Just attend any business meeting with the team and you will know it immediately.”
NowPay plans to use the latest funds to ‘deepen the capabilities’ of its platform, expand its team, and potentially launch in some other markets (in the region and beyond). The startup did not share the details about the markets it is eyeing for expansion. There are some other players that also offering similar services in the region, including FlexxPay and Bayzat.