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Egypt

Five Egyptian fintechs to watch

  • Egyptian fintech e-finance recently announced plans to go public in Q4; this is one of many IPOs planned this year

  • Including e-finance, we showcase two other Egyptian firms intending to IPO soon: Ebtikar Holding and Aman Holding

  • We also highlight 5 fintechs capturing Egypt's strong growth opportunity: Fawry, Paymob, Thndr, Telda and MoneyFellows

Five Egyptian fintechs to watch
Rahul Shah
Rahul Shah

Head of Financials Equity Research

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Contributors
Rabail Adwani
Rohit Kumar
Tellimer Research
22 September 2021
Published byTellimer Research

Egyptian digital payments infrastructure firm e-finance recently announced plans to offer up to 14.5% of its shares in an initial public offering in Q4 this year. This is one of many fintech IPOs planned this year.

Previously there have not been many Egyptian fintech IPOs, but the strong performance of Fawry since its August 2019 IPO is encouraging other firms to consider public listings. This would widen the opportunity set for listed equities investors and provide pre-IPO investment openings for private equity.

In this report, we showcase three Egyptian firms (including e-finance) intending to list their shares over the coming years. We also highlight five companies with interesting approaches to capturing Egypt's strong growth opportunity and profile 84 firms making up the fintech ecosystem.

Several fintech IPOs are in prospect

e-finance (Payments)

e-finance was established in 2005 by the Egyptian government to build, operate, and manage the sovereign's financial payments hub. It has now grown to become a much wider digital payments platform offering services to businesses and consumers through a fully integrated suite of digital services. e-finance handles EGP1.6tn of government transactions annually, has issued 40mn+ cards to date, operates an ATM network of over 13,000 and owns and manages more than 50,000 points of sale.

The company has three subsidiaries of interest:

  1. Integrated Smart Solutions, a business-to-business (B2B) model specialising in smart cards

  2. Khales Retail Network, a business-to-consumer (B2C) and business-to-business-to-consumer (B2B2C) digital payments solution that eases payments and collection processes

  3. eAswaaq, an e-commerce market platform that provides agricultural, commercial and industrial solutions

The firm announced its IPO plans for Q4 this year.

e-finance business model

Source: Company website

Ebtikar Holding (Payments)

Ebtikar, founded by B Investments and MM Group in 2017, is a financial services holding company. Ebtikar is currently undergoing a restructuring of its portfolio, after which it will own two Egyptian digital payments companies, Bee and Masary. Vodafone is another large investor in Bee and Masary. Ebtikar Holding expects its IPO will take place near the end of 2021 or in early 2022.

Bee was established in 2010 and is now a leading e-payments solution provider in Egypt. It also operates a retail network of more than 54,000 points of sale. The platform offers payments collection services to various mobile network operators like Orange, Vodafone and Etisalat. Bee also provides payments services to end-users, such as utility bills, transportation tickets, cinema tickets and university fees. Ebtikar bought a 60% stake in Bee in 2017 for EGP156mn (US$8.8mn) and now owns 80% of this business.

Masary is one of Egypt's largest payments facilitators and aggregators. It was established in 2009 and now offers collection services to more than 90 service providers and operates a network of more than 64,000 points of sale. Masary also provides services for Egypt’s landline operators (like Orange, Vodafone, Etisalat) as well as the country's electricity, water and gas utilities, among other government entities. Other services also include education fees, insurance services, mobile wallets, transportation tickets and charity donations. Ebtikar bought a 33.7% stake in Masary in 2018 for EGP130mn (US$7.2mn) and currently owns 72% of the business.

Aman Holding (Payments and BNPL)

Aman Holding is a subsidiary of Raya Holding, a leading IT investment conglomerate listed in Egypt. Aman Holding has three main arms:

  1. Aman for e-payments, facilitating digital payments with 100,000 touchpoints across Egypt

  2. Aman for financial services, providing goods and services instalment loans to 150,000 customers via its own website and partner merchants

  3. Aman for microfinance, which offers loans to micro and small enterprises to help them establish and scale up their businesses

Aman Holding has certain other initiatives in the pipeline, including a securitisation licence and building another SME financing entity. Recently, Raya Holding sold a 24% stake in Aman Holding to the National Bank of Egypt, valuing the company at EGP1.76bn (US$112mn). Aman Holding expects to list its shares within the next two years.

We have previously published two reports relating to upcoming emerging market fintech IPOs, highlighting 12 companies in digital payments space and another 7 fintechs planning to list in the future.

Five Egyptian fintechs to watch

Fawry (Payments)

Fawry provides payments services to 20mn individuals through multiple channels such as online, mobile wallets, and at more than 225,000 physical locations such as ATMs and stores. With more than 3mn financial transactions on daily basis, Fawry became the first Egyptian electronic payments company to reach a US$1bn market valuation, following strong share price performance since its IPO in August 2019. It has also been one of the best-performing stocks in the pandemic.

Paymob (Payments)

Paymob is Egypt’s largest digital payments company – it has more than 12mn users and processes c85% of the country's mobile wallet transactions. Paymob raised US$18.5mn of funding in its April 2021 Series A funding round, making it the largest Series A fintech transaction in Egypt. The company has plans to expand internationally, first into Sub-Saharan Africa and then into the GCC.

Thndr (Investech)

Thndr, an investech company, aims to make it easy for people to invest in stocks, bonds and funds, without charging them any commission. It received a brokerage licence in August 2020. High-profile international firms like Zerodha in India and Robinhood in the US, which have rapidly become two of the largest brokerage houses in their home markets, signal Thndr's potential to emerge as the leading retail investment platform in Egypt.

Telda (Payments)

Telda simplifies the digital payment experience for the financially excluded and has been designed with Generation Z/digital natives in mind. The firm was founded in April 2021 and acquired funding of US$5mn the following month from Sequoia Capital, one of the world's leading venture capitalists. Telda is the first company to receive a license from the Central bank of Egypt under the new Banking Agents regulations. Within a month of launch, the firm registered 30k signups, with a further 17k on the waiting list.

MoneyFellows (Lending)

MoneyFellows is a group lending and savings platform. It secured US$4mn Series A funding from Global VC Partech and Sawari Ventures. The company has updated the traditional ROSCA (Rotating Savings and Credit Association) model and is serving more than 150,000 active users.

In the table below we briefly profile other firms making up Egypt’s financial services ecosystem.

Egypt's fintech landscape

Related reading:

The ultimate guide to Egypt fintech