Wamda invests in UAE FinTech FlexxPay
The start-up, which allows employees to access part of their earned salaries between pay cheques, raised $1.5 million in its latest funding round
UAE FinTech FlexxPay raised approximately $1.5 million (Dh5.5m) in a pre-series A round from funders including Wamda Capital, the Dubai venture capital firm that has invested in prominent regional start-ups such as Souq and Careem.
FlexxPay, which allows employees to access part of their already-earned salaries in between pay cheques, signed up its first batch of UAE corporate customers in June and expanded to Saudi Arabia in September.
“FlexxPay is targeting a very clear pain point with an innovative and unique solution that will help unlock individuals’ income on an as-earned basis,” said Fadi Ghandour, executive chairman at Wamda, in a statement. “We are confident in the team’s ability to drive the company forward and are excited to partner with them on that journey.”
The online platform previously raised an undisclosed seed funding amount from individual and corporate investors in December last year. The latest funding round was led by Wamda and Arzan Venture Capital, as well as existing investors.
Michael Truschler, co-founder and chief executive of FlexxPay, said he has known Mr Ghandour for around 15 years.
“They knew what we were doing and they were interested,” Mr Truschler told The National. “Having Wamda as an investor further validates our business model and inspires our team as a whole. It’s a very positive sign.”
FlexxPay recently signed a partnership agreement with Riyad Bank, which said in its October financial results that it is the third- biggest retail bank in the kingdom based on revenue. In the UAE, it has partnered with Abu Dhabi Commercial Bank to process salary payments.
Corporate clients are able to sign up to the platform at no cost. Employees can then use the app to request up to 50 per cent of salary already earned (to a maximum of $500) for an average fee of Dh25.
The start-up aims to solve the problem of living from pay cheque to pay cheque. Similar models have been in place in North America and Europe, such as PayActiv, Earnin and Wagestream.
Financial matters are a major source of stress for employees, with 59 per cent stating that finances are their primary cause of concern, according to PwC’s eighth annual Employee Financial Wellness Survey 2019. That is more than all other stress factors, such as job, relationships and health concerns, combined.
Dozens of companies have signed up for FlexxPay, including pick-up and delivery service Fetchr in the UAE, and corporates in the automotive and telecom industries in Saudi Arabia.
“In the last three-to-four months, we have gained a lot of traction. We see that Saudi will be a focus for us in 2020,” Mr Truschler said.
Updated: December 9, 2019 08:54 AM