Fawry chief executive Ashraf Sabry founded the Egyptian digital payments platform in 2008. Photo: Fawry
Fawry chief executive Ashraf Sabry founded the Egyptian digital payments platform in 2008. Photo: Fawry
Fawry chief executive Ashraf Sabry founded the Egyptian digital payments platform in 2008. Photo: Fawry
Fawry chief executive Ashraf Sabry founded the Egyptian digital payments platform in 2008. Photo: Fawry

Fawry aims to retain its top spot in Egypt’s FinTech space


Nada El Sawy
  • English
  • Arabic

It is a time of change for the Egyptian digital payments platform Fawry, after 13 years in the market, its chief executive and founder Ashraf Sabry says.

Amid growing competition in Egypt’s FinTech space and a tough economic environment, the company is exploring listing a portion of its shares in the US, seeking to raise new capital, widening its investor base and introducing more services.

“My feeling is that the era of very high valuations is not going to continue. We have witnessed that in the capital market in the US, followed by the capital market in Egypt,” Mr Sabry told The National.

“[FinTechs in Egypt] will have to exert a lot of effort in the coming two years and have a business that has very clear foundations.”

FinTech companies have been flourishing in the country of more than 100 million people, tapping into a largely unbanked population while benefitting from new central bank regulations and an influx of investments.

Last year, Egyptian start-ups raised a record $491 million in 147 deals and attracted the highest percentage of foreign investors in the Middle East and North Africa, according to data platform Magnitt. FinTech accounted for 17 per cent of total deals closed in the country.

On top of the game

Founded in 2008, Fawry offers bill payment and financial services to consumers and businesses through a variety of channels across more than 225,000 locations in Egypt.

As the Covid-19 pandemic accelerated the shift to digital payments with consumers switching to cashless payments and online shopping, Fawry became Egypt’s first unicorn, hitting a market capitalisation of more than $1 billion in August 2020 — one year after its listing on the Egyptian stock exchange (EGX).

In February 2021, the company's valuation surpassed $2bn. However, its share price has fallen by more than 50 per cent from its May peak of 12.77 Egyptian pounds ($0.69), valuing the company at about $800m as of this week. Fawry's shares closed at 4.57 pounds on the EGX on Wednesday.

“The subdued performance recently is because of the turbulence in global stock markets in general,” said Hisham Hamdy, equity research analyst at Naeem Holding. “The EGX isn’t doing well, but fundamentally, Fawry is very strong.”

In the company's full-year earnings, released last week, Mr Sabry called 2021 “Fawry’s strongest year yet”.

Revenues rose 34 per cent year-on-year to 1.66bn pounds, though net income dipped 5 per cent to about 177m pounds.

Meanwhile, stock markets globally are closely watching a potential US interest rate hike next week, rising inflation and the economic impact of Russia’s war in Ukraine.

In Egypt — as in many other countries — the Russia-Ukraine crisis has led to higher food prices, reduced tourism inflows and falling foreign currency reserves. Last month, the Central Bank of Egypt raised interest rates for the first time since 2017 and devalued the pound by 14 per cent.

Egypt is also negotiating with the International Monetary Fund for a financial support package.

“Egyptian share prices in US dollars terms are breaking below the multi-year support line. More downside is likely. Chances are that this bourse will underperform the EM [emerging market] equity benchmark,” BCA Research said in a note earlier this month.

Gulf countries have committed up to $22bn in central bank deposits and investments to help Egypt weather the crisis. That includes $2bn from the UAE, $5bn from Qatar and $15bn from Saudi Arabia.

Raising new capital

Abu Dhabi’s holding company ADQ spent about $1.8bn to acquire stakes in five publicly-listed Egyptian companies — including Fawry — last month, to help bolster the country's economy and capitalise on its investment potential. The move is part of ADQ's $20bn joint strategic investment platform with The Sovereign Fund of Egypt that was launched in 2019.

As part of the deal, ADQ purchased 215.1 million Fawry shares for $68.6m, as well as a rights issue for another 201.6 million shares worth $54.9m. A rights issue allows shareholders to buy new shares at a discount for a certain period.

ADQ’s Alpha Oryx purchased the shares from the two state-owned banks: Banque Misr and the National Bank of Egypt. It is now Fawry’s largest institutional shareholder with 12.6 per cent of the company’s shares.

Other institutional shareholders include Link Hold Company, Banque Misr, the Egyptian-American Enterprise Fund, Black Sparrow Long Term Investments, Actis Egypt Payments and the National Bank of Egypt.

In January, Fawry received an approval from its board of directors to create an American Depositary Shares (ADS) programme, which would allow the company to list shares in the US. Mr Sabry said Fawry is exploring an SEC-registered secondary offering to follow, but declined to provide further details or a timeline.

“We are a large platform serving millions of Egyptians, and accordingly, listing on [the] EGX was most appropriate for the company,” Mr Sabry said.

“As long as investors have the appetite to invest in the Egyptian stock exchange … then it makes sense. Sometimes the market conditions will not encourage investors to invest in the local exchange and then you have a problem.”

Expanding product offerings

Fawry will use the nearly $55m raised through ADQ’s rights issue purchase to widen its product offerings, including a buy-now-pay-later (BNPL) platform, myFawry pre-paid cards, consumer finance and a mutual fund with Misr Capital.

The company also plans to expand its nationwide point-of-sale network, its Fawry Plus branches and users of its myFawry app, which racked up nearly five million cumulative downloads in 2021, compared to 1.7 million in 2020.

Mr Sabry expects Fawry’s business to grow more than 40 per cent this year.

“All components of the business will drive the overall revenue growth. However, new business initiatives like acceptance, agent banking services and financial services will be higher contributors to our growth,” he said.

Last year, Fawry acquired minority stakes in Egyptian food delivery app elmenus and social e-commerce platform Brimore. In February, it co-launched Roaderz, a platform linking couriers and small delivery operations to e-commerce merchants and social sellers.

Fawry's ultimate goal is to become a “super app” that provides a variety of lifestyle services to its customers.

“Our direction is that we are focusing on the three main anchor dimensions of a super app, which are digital payments, financial services and commerce,” Mr Sabry said.

There are over a dozen financial services and e-payments companies in Egypt, including Aman, Bee, Khazna, Masary and MNT-Halan.

“Currently, Fawry is the market leader in the e-payments area,” said Mr Hamdy of Naeem Holding.

If Fawry continues to invest in the Egyptian market, retain customers and offer more services, it is unlikely to lose market share “but, of course, the throughput value could be eaten because of competition”, he added.

As for international expansion, Fawry ventured outside Egypt for the first time last year with an investment deal in Sudan’s alsoug.com e-marketing platform.

“Our expansion strategy is to leverage our technology in partnership with reputable local partners in underserved countries,” Mr Sabry said.

“Egypt is such a big market that we want to focus on. However, this does not stop us from being opportunistic.”

UAE currency: the story behind the money in your pockets
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Labour dispute

The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.


- Abdullah Ishnaneh, Partner, BSA Law 

Nancy 9 (Hassa Beek)

Nancy Ajram

(In2Musica)

Key facilities
  • Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
  • Premier League-standard football pitch
  • 400m Olympic running track
  • NBA-spec basketball court with auditorium
  • 600-seat auditorium
  • Spaces for historical and cultural exploration
  • An elevated football field that doubles as a helipad
  • Specialist robotics and science laboratories
  • AR and VR-enabled learning centres
  • Disruption Lab and Research Centre for developing entrepreneurial skills
Bugatti Chiron Super Sport - the specs:

Engine: 8.0-litre quad-turbo W16 

Transmission: 7-speed DSG auto 

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Torque: 1,600Nm

0-100kph in 2.4seconds

0-200kph in 5.8 seconds

0-300kph in 12.1 seconds

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Price: Dh13,200,000

Bugatti Chiron Pur Sport - the specs:

Engine: 8.0-litre quad-turbo W16 

Transmission: 7-speed DSG auto 

Power: 1,500hp

Torque: 1,600Nm

0-100kph in 2.3 seconds

0-200kph in 5.5 seconds

0-300kph in 11.8 seconds

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Price: Dh13,600,000

The candidates

Dr Ayham Ammora, scientist and business executive

Ali Azeem, business leader

Tony Booth, professor of education

Lord Browne, former BP chief executive

Dr Mohamed El-Erian, economist

Professor Wyn Evans, astrophysicist

Dr Mark Mann, scientist

Gina MIller, anti-Brexit campaigner

Lord Smith, former Cabinet minister

Sandi Toksvig, broadcaster

 

THE CLOWN OF GAZA

Director: Abdulrahman Sabbah 

Starring: Alaa Meqdad

Rating: 4/5

Volvo ES90 Specs

Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)

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UAE currency: the story behind the money in your pockets
UAE currency: the story behind the money in your pockets
Gender equality in the workplace still 200 years away

It will take centuries to achieve gender parity in workplaces around the globe, according to a December report from the World Economic Forum.

The WEF study said there had been some improvements in wage equality in 2018 compared to 2017, when the global gender gap widened for the first time in a decade.

But it warned that these were offset by declining representation of women in politics, coupled with greater inequality in their access to health and education.

At current rates, the global gender gap across a range of areas will not close for another 108 years, while it is expected to take 202 years to close the workplace gap, WEF found.

The Geneva-based organisation's annual report tracked disparities between the sexes in 149 countries across four areas: education, health, economic opportunity and political empowerment.

After years of advances in education, health and political representation, women registered setbacks in all three areas this year, WEF said.

Only in the area of economic opportunity did the gender gap narrow somewhat, although there is not much to celebrate, with the global wage gap narrowing to nearly 51 per cent.

And the number of women in leadership roles has risen to 34 per cent globally, WEF said.

At the same time, the report showed there are now proportionately fewer women than men participating in the workforce, suggesting that automation is having a disproportionate impact on jobs traditionally performed by women.

And women are significantly under-represented in growing areas of employment that require science, technology, engineering and mathematics skills, WEF said.

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Price: from Dh362,500

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Director: Laxman Utekar

Cast: Vicky Kaushal, Akshaye Khanna, Diana Penty, Vineet Kumar Singh, Rashmika Mandanna

Rating: 1/5

The bio:

Favourite film:

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1) Beware of cheques presented late on Thursday

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Pupils in Abu Dhabi are learning the importance of being active, eating well and leading a healthy lifestyle now and throughout adulthood, thanks to a newly launched programme 'Healthy Lifestyle'.

As part of the Healthy Lifestyle programme, specially trained coaches from City Football Schools, along with Healthpoint physicians have visited schools throughout Abu Dhabi to give fun and interactive lessons on working out regularly, making the right food choices, getting enough sleep and staying hydrated, just like their favourite footballers.

Organised by Manchester City FC and Healthpoint, Manchester City FC’s regional healthcare partner and part of Mubadala’s healthcare network, the ‘Healthy Lifestyle’ programme will visit 15 schools, meeting around 1,000 youngsters over the next five months.

Designed to give pupils all the information they need to improve their diet and fitness habits at home, at school and as they grow up, coaches from City Football Schools will work alongside teachers to lead the youngsters through a series of fun, creative and educational classes as well as activities, including playing football and other games.

Dr Mai Ahmed Al Jaber, head of public health at Healthpoint, said: “The programme has different aspects - diet, exercise, sleep and mental well-being. By having a focus on each of those and delivering information in a way that children can absorb easily it can help to address childhood obesity."

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Director: Louis Theroux

Starring: Daniella Weiss, Ari Abramowitz

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Updated: May 19, 2023, 4:19 PM`