The funding round was led by VentureSouq, a MENA-based venture capital firm, with new investors M-Capital and Bunat Ventures joining in, along with existing investors Global Ventures and Aditum Investment Management.
Hakbah start-up registered a fast development in MENA and operates in KSA’s USD 216 billion savings market. It has also formed several important partnerships with blue-chip companies including low-cost airlines in the Middle East and Saudi Arabia.
As per an official press release, the funds raised from the Series A funding round will be utilised for improving product development, with a specific focus on Machine Learning and further improving the company’s integrable savings engine. The capital will be reserved to attract and support talents in the region and reinforce Hakbah's platform. Additionally, the company is planning to enter two regional markets shortly, either through a partnership or a strategic alliance.
Through its social savings platform, Hakbah intends to increase financial inclusion in the region and fully integrate with any banking system in less than a week. This includes the digitisation of traditional group savings (Jameya) with the purpose of spending on financial needs. Moreover, the savings platform makes savings accessible especially to the underbanked population.
Savings groups are a popular and traditional way of saving money in over 60 countries worldwide. Thus, Hakbah’s users prioritise total needs over time and share the pool of money, which is rotated amongst them afterwards. This upgrades traditional savings behaviour, allows saving for purpose, and increases financial literacy.
The official press release shows that savings are a key objective in ‘Saudi Vision 2030’ and very important to the country’s Financial Sector Development Program, thus Hakbah’s model is expected to tackle the Middle East savings crisis. Moreover, according to the official paper, 70% of Saudi citizens don’t own emergency savings, while the country’s household savings rate averages just 1.6%.
As per Hakbah’s statement, the Series A funding round will help to accelerate its growth plans and financial stability for individuals, while continuing to work to build a savings platform via which individuals can save easily, quickly, and collectively. It also aims to double the individual savings ratio in Saudi Arabia by 2025 and to offer digital solutions for 60% of the population under 30 by leveraging machine learning and customer behaviours.
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