Dubai-based investment advisory platform Sarwa has raised $8.4 million in a Series A round, it announced today in a statement to MENAbytes. It takes total investment raised to date by Sarwa to close over $10 million, which makes it one of the best-funded fintechs of the region.
The round is led by Kuwait Projects Company (aka KIPCO), one of the leading investment holding companies of the region with consolidated assets of over $34 billion, and joined by Dubai International Financial Center, Abu Dhabi Investment Office, Saudi-based Vision Ventures, UK’s Hambro Perks. Some existing investors also participated in the round.
The statement by Sarwa points out that it is the first time that a regional investment group collaborates with a regional fintech, “KIPCO’s move confirms that it is the right time for the market to move towards affordable, accessible investing. In parallel, KIPCO, through its regional presence, will support Sarwa in its growth.”
Founded in December 2017 by Mark Chahwan, Jad Sayegh, and Nadine Mezher, Sarwa’s platform that uses a combination of technology and human advice allows an average user to invest their savings at (what it says is) a very low fee.
The startup had officially launched its platform in February 2018 and reached over 10,000 registered users since then. Sarwa claims to have grown by 10x in 2019.
It was the first participant to graduate from Dubai Financial Services Authority (DFSA) regulatory sandbox and receive a full Dubai Financial Services Authority Innovation License.
After acquiring the full license, Sarwa had opened its platform to users across the world (excluding the United States and few other countries). It was previously available only to the residents of the United Arab Emirates.
Last year, Sarwa had also lowered the minimum balance required to open and maintain an account from $2,500 to $500 and had introduced Halal and Socially Responsible Investing (SRI) portfolios for its users.
How it works: The users register on the platform after which they are asked to answer a few questions that help Sarwa understand the financial goals and risk appetite of the user. Based on the answers, Sarwa builds a portfolio and recommend an investment plan. Once the user accepts, they put the money work in international markets through the use of Exchanged Traded Funds and help the users reblance when needed, optimize for taxes, and reinvest dividends.
Mark Chahwan, the co-founder and CEO of Sarwa, commenting on the occasion, said, “The coming together of a large institution that understands how to build leading asset managers, with the first licensed Fintech out here sets a great example for the region. This is a vote of confidence from a Financial Institution that decided to collaborate with a team they trust to deliver superior client experiences and investment returns in wealth management.”
“All our partners believe in what we are trying to achieve: making investing as smart and simple as can be and allowing anyone to grow their wealth and build for a better future,” he added.
Osama T. Al Ghoussein, KIPCO SVP Banking who has joined Sarwa’s board after making the investment, said, “KIPCO is delighted to be making its first fintech investment in Sarwa, which shares our belief in the need to encourage more people in the region to save by making available more accessible and reliable investment platforms.
“Sarwa speaks the language of the younger generation, an important and growing untapped segment. Our investment will give Sarwa access to KIPCO’s network of businesses and clients across the region, thus enabling the fintech company to benefit from our regional presence as we strive together to grow the business and expand its reach,” he added.
Ali Qaiser, Managing Director at Hambro Perks, commented, “As a tech-enabled financial platform with strong growth in the region, Sarwa is an excellent addition to our portfolio. Hambro Perks backs game-changing companies and Sarwa has the potential to reinvent its sector. This is the first of many investments Hambro Perks plans to make in the Gulf in 2020 and we are excited that Sarwa is our steppingstone here.”
With Abu Dhabi Investment Office joining the round, Sarwa’s first geographical expansion will be to Abu Dhabi where the company is growing its tech team.