Cards are on the rise in Egypt, with over 30 million in circulation (prepaid cards in particular are used more frequently than debit and credit cards combined). This increase in card usage, which has increased by about 14% over the past four years, is primarily due to incentives introduced by fintech companies and banks, attracting millions of Egyptian consumers who previously relied primarily on cash for their transactions .
Things look different when introducing company cards. Companies of all sizes have been hesitant to adopt corporate cards because of limited access and inadequate spending controls for their use.
Traditionally, banks have been the main providers of corporate cards across the country; However, fintech companies are now also coming onto the scene to promote acceptance. Swypex, one such fintech company that offers corporate cards and management tools for businesses, has raised $4 million, which it will use to expand its business and technical capabilities on its platform.
Photo credit: Swypex
According to a UNDP report, around 3.8 million businesses in Egypt face the challenge of complicated and rigid financial systems. Like many other businesses across Africa, these companies use multiple unrelated methods to manage their finances, leading to inefficiencies. Employee fraud is also a problem, with companies losing an average of 5% of their revenue annually to fraudulent activities, often resulting from cash transactions such as misappropriation of assets and false financial reporting.
We are preparing for takeoff
Nevertheless, there are significant tailwinds from a regulatory perspective; For example, Egypt’s top bank, the Central Bank of Egypt (CBE), launched initiatives such as the Instant Payment Network (IPN) to reduce cash-based transactions and promote digital payments.
Several fintechs in Egypt, including Swypex, are using such initiatives to provide necessary financial services while complying with central bank guidelines. CEO Ahmad Mokhtar explained that the startup, which was founded in early 2022 but is only now emerging from stealth mode, has dedicated its first year to acquiring key licenses, ensuring regulatory compliance and working with payment processors and bank sponsors. In December last year, Swypex introduced the beta version for 100 customers.
“We spoke to hundreds of different companies, from startups to SMEs to large corporations, enterprises and listed companies, to understand what challenges they faced at different stages,” said Mokhtar, who co-founded the startup with Tarek Mokhtar (CPO) and Sasan founded Hezarkhani (CTO), on the problem Swypex is addressing. “We found that there were certain problems that had not been solved in the last decade or two, such as companies using predominantly cash and losing track of their money, or using banking services that were somewhat outdated, so they who had to visit banks. “Many have to sign physical papers and documents to get things started for their company.”
All-in-one financial management platform
Mokhtar said Swypex provides companies with an “unlimited” number of corporate cards for their employees. The platform allows these companies to set up smart controls to manage their expenses, such as: For example, you can set different limits and set usage permissions for ATM withdrawals and online transactions. After transactions, employees can upload receipts, invoices and expense details, which are summarized in a central dashboard with integrated data from the government’s e-invoicing platform. In addition to ERP and accounting software integrations, Swypex offers companies a streamlined and comprehensive overview of all expenses and expenses in a single place.
“Companies using our platform can see spend distribution analytics at every department, dealer, individual and category level,” said Tarek Mokhtar, the company’s chief product officer. “We also categorize all spend on the platform to provide comprehensive insights. A company’s financial health and every line item can help companies make data-driven decisions based on the real-time visibility we provide them.”
Swypex’s competition in the corporate card space across Africa includes YC-backed companies such as Boya and Bujeti. In Egypt it is banks like HSBC and National Bank. Mokhtar argues that Swypex is a better option for businesses because it allows for greater customization of its offerings and offers a wider range of features and services, including unlimited card issuance and advanced controls. “Our focus on things like user experience and instant control over these cards like blocking them and integrating all of that automation is fundamentally new to the market,” the CEO said.
The two-year-old all-in-one financial management platform, which provides businesses with their first three cards for free, generates revenue from interchange fees, floats and FX markups.
Increase in corporate cards in the coming years?
Accel, the legacy venture capital firm making its first investment across the MENA region (although it has backed an African money transfer app), led the $4 million seed round in Swypex. Investors participating in the round included Foundation Ventures, The Raba Partnership and other angel investors.
For a startup just emerging from beta after a few months, this is significant, especially in a difficult funding environment where traction and revenue are priorities. But there are good reasons why it attracted investment even before its official launch: Swypex has the potential to appeal to a large market (the company is targeting a part of the cards and payments market worth over $10 billion and will expected to grow at an annual growth rate of 10% over the next three years). years), as Mokhtar points out, along with the founders’ background in building products at scale for global companies like Twitter, PlayStation and Spotify.
“As payments continue to digitize, the ability to offer modern fintech products to Egyptian businesses has become even more important,” Richard Kotite, vice president of Accel, said in a statement. “Ahmad, Tarek and Sasan have identified a gap in the market for a comprehensive B2B solution that addresses many of the key issues businesses regularly face, while delivering a significant boost in efficiency. We see a real opportunity for Swypex to become a fintech champion across the Middle East. The team is technically experienced and very ambitious and we are excited to accompany them on this journey.”