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Money Fellows secures USD 31 mln in Series B funding round

Monday 31 October 2022 12:34 CET | News

Egypt-based fintech Money Fellows has raised USD 31 million in series B funding to grow its portfolio of services and expand across Africa and Asia.

 

The investment round was led by CommerzVentures, Middle East Venture Partners, and Arzan Venture Capital, having as additional participants Invenfin and National Investment Company, as well as existing investors such as Partech, Sawari Ventures, 4DX, and P1Ventures.

The raised capital will enable Money Fellows to help accelerate its growth by having its portfolio of services diversified and its product offering across the B2C & B2B segments expanded across Africa and Asia, the investment believed to help the company become the leading financial platform in Middle East and Africa by 2025. 

Money Fellows has raised USD 31 million in series B funding to grow its portfolio of services and expand across Africa and Asia.

Money Fellows product offering

Founded in Egypt in 2014, Money Fellows is a mobile-based platform that digitises money circles or Rotating Savings and Credit Associations (ROSCAs), a system where a group of people agree to contribute money for a specific period, borrowing and saving together. The fintech provides access to financial planning services to help ensure users can manage and plan their financial obligations in an effective manner and achieve their financial goals. It is the first fintech to offer global next generation digital ROSCAs, providing a secure and convenient alternative to traditional finance. 

Depending on where they are positioned in a ROSCA cycle and when they receive a payout, Money Fellows users are classified as borrowers, savers, or planners. Users who choose its early spots are charged a one-time service fee of approximately 6%, the percentage decreasing over time and turning into incentivised interest paid to users at the end of the cycle. 

Furthermore, the fintech includes a B2B play, partnering with Egyptian merchants to sell their products within the app and enable customers to benefit from discounts. In addition to charging fees in its ROSCAs, Money Fellows generates a markup commission on these products. The fintech also plans to extend their financial services offering to buy now pay later, pension, and cards, where the company is looking to make interchange fees. 

ROSCAs and how they work

ROSCAs are believed to be a global USD 700 billion opportunity, being popular in over 90 emerging and developing markets under several names: Esusu or ajo in Nigeria, Kameti or chit fund in India, and Gameya in Egypt. The decision to launch the platform in Egypt follows the fact that the country has a functioning ROSCA system. 

Presuming that 10 people agree to pay USD 1,000 on a monthly basis for a ten-month period, at the end of each month a member gets USD 10,000 and it keeps rotating until everyone receives their pay out, a system that works best within a trusted group of participants. However, offline ROSCAs as thus limited, as participants can experience difficulties in accessing more capital. Money Fellows offers people a broader pool of participants across Egypt, with each participant having to go through a credit assessment process, enabling its users to form and join ROSCA groups through its app. 

Money Fellows has more that 4.5 million users registered on its platform, out of which 7% are monthly active users, with the average pay out ticket per user being approximately USD 1,100 and claims to have experienced an 8x year-over-year growth.

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Keywords: funding, investment, B2B payments, financial services, digital banking
Categories: Banking & Fintech
Companies: Money Fellows
Countries: Egypt
This article is part of category

Banking & Fintech

Money Fellows

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