Connect Money scores $8 million to enable non-bank companies to offer integrated financial services

Banking-as-a-Service (BaaS) platforms play an important role in driving access to digital financial services by introducing fintech capabilities to non-banking businesses. Several companies are using these platforms to bypass the need to build their own technical infrastructure and the bureaucratic processes of obtaining the required regulatory approvals to offer financial services, including card payments and loans.

Globally, forecasts show that companies will continue to use BaaS platforms over the next decade to launch new financial services, grow revenues and improve customer experience and retention. Increased adoption will increase the value of the BaaS market $22.6 billion by 2032, supported by a compound annual growth rate (CAGR) of 19.3%, according to a recent report from Allied Market Research.

As BaaS becomes ubiquitous, Egyptian fintech Connect Money is looking to leverage its popularity to explore emerging business opportunities in African markets. The startup enables merchants to issue white-label debit and credit cards to their customers to access various financial services, including payments and credit.

The fintech, which launched early this year, is now plotting growth inside and outside Egypt, including in markets such as Morocco and Kenya, backed by $8 million in seed funding from a round co-led by Egypt-based venture capital funds DisrupTech Ventures, Algebra Ventures and Lorax Capital Partners. , with the participation of One Stop Capital and MDP.

Connect money was co-founded by Ayman Essawy (CEO), Wadi Jalil (CTO) and Abdelaziz Sarhan (COO), who saw the opportunity to help companies bank their customers.

“We've seen this at Amazon with payment services and many other digital platforms. We believe that even traditional companies can bank their customers and increase customer service, ultimately becoming real banks. This is what we are trying to build; a one-stop shop for traditional and digital businesses, so they don't have to build the infrastructure or invest millions in CapEx. They simply pay a subscription service per card per month, which we then manage from the back-end,” says Essawy, who, before founding Connect Money, co-founded LuckyOne, a consumer app for credit, offers and cashback rewards. He is also part of the team that launched DSquares, a 12-year-old loyalty platform provider active in several markets, which is going public in Saudi Arabia “within the next few years.”

Essawy said Connect Money has many use cases across industries, including agriculture, where supply chain companies can, for example, provide white-label cards and become banks for farmers.

“Basically the entire value proposition is in connecting these companies with cash users. So we are talking about embedded finance as the core market,” he said.

Overall, Essawy said, the platform can be used by businesses, especially those that have long and costly settlement cycles, to make immediate payments and payouts. Businesses can also embed loyalty programs into the cards, while lenders use the technology to digitize their operations and extend credit. Essawy said their customers get these capabilities at a fraction of the cost and without long wait times to obtain licenses from regulators to offer the financial services.

Connect Money's support to businesses includes card issuance, KYC, customer support and mobile banking app development.

The startup joins a handful of fintechs in Africa's emerging BaaS space, including Nigeria's Anchor, Maplerad and Bloc, that are making financial services easily accessible to the masses by enabling businesses to deliver tailor-made financial services to their consumers to offer.

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