Funding FinTech - January 2017

Funding FinTech - January 2017

NextMoneyDXB, organized its third event in Dubai on Tuesday, the 31st of January on the topic of finding funding for fintech startups in partnership with Emirates NBD, a key sector player in the area of supporting fintech innovation. More than 90 fintech entrepreneurs, investors as well as people from the banking or consultancy sectors attended. The event was also livestreamed by OVN DXB on the global Youtube channel of Next Money.

The event was moderated by Aaron Oliver, the Head of Digital Commerce at Mastercard MENA and had as guest speakers Sabah Al-Binali, former Chief Investment Officer and founder of the Zawya platform along with Alper Celen, the founder of startups such as Mondo Ride, Medigo and Joi as well as an avid advisor and investor in the region. Well-recognized fintech startups such as NOW Money and Monami were also present to share their views during the Q&A session.

The discussions covered a comparative perspective of the state of MENA investments in comparison to other regions in the world such as Europe and America as well as how advanced  the fintech ecosystem is in the Middle East.

‘There's no adventure in venture here.’

Sabah Al-Binali

Sabah Al-Binali kickstarted the debate by addressing the venture capital market in the region explaining that, from his point of view, if a VC is not ready to invest in a business plan, he’s not a VC. He considers that firms wanting to see revenue and clients are at best early Private Equity firms and concluded with a bold statement by saying that he has yet to see a VC deal here.

His advice for fintech startups looking for funding is, first and foremost, for them to know more about what the investors want than what the investors know about them in the beginning. Also, he put an emphasis on fintech startups understanding the value of their exit strategies as startups need move away from the growth seen on paper and give investors a clear route to book profits after a reasonable holding period. Mr. Al-Binali gave the example of the exit from Zawya that happened after 12 years only because the founders wanted to give returns to their investors.

As an overarching teaching for the fintech startups, he warned them about the fact that people in the region are more tempted to bring great fintech ideas within the system of big companies they work for instead of funding them. He recommended crowdfunding as a bridging solution and as an opportunity to really find the right investor.

Alper Celen also advised fintech startups present at the event to prepare for gaps in funding as series B, in general, is a difficult step for investors and startups from the region to take.

‘Raising $5m seed in this region is unheard of.

We have a gap around the $5-10m mark.’

Alper Celen

Alper said that he considers that if a business is profitable by Series, it’s either a monopoly or a lifestyle business. In this context, he believes that the fintech startups ecosystem is not at all saturated in the Middle East. On the contrary, he believes that it is still in its nascent form.