UAE accounting start-up Wafeq raises $3m as it aims to enter Egypt

Software-as-a-service start-up Wafeq has raised $3 million in a seed-funding round, as the UAE-based company aims to enter Egypt and scale up its services across the region.

The investment round was led by Riyadh venture capital firm Raed Ventures and saw the participation from Wamda, which aims to accelerate entrepreneurship ecosystems across the Middle East and North Africa.

Launched in 2019, Dubai-headquartered Wafeq is an accounting platform that intends to address the “unmet finance and accounting needs of small and medium businesses in the Middle East”, the company said.

The latest fundraising round will help the company to enter Egypt — the Arab world's most populous country — and double down on its presence in Saudi Arabia and the UAE, the region's biggest economies, it added.

“We are simplifying and reimagining accounting compliance for business owners and accountants,” said Nadim Alameddine, chief executive and founder of Wafeq.

“Thriving small and medium businesses continue to power the engines of our economy. However, as they grow, they need to comply with current and new accounting regulations in this dynamic ecosystem.”

Businesses using Wafeq create more than 630,000 invoices every month, with total monthly invoiced amounts exceeding $117 million, the company said.

The company claims its technology helps businesses run efficiently while staying compliant with existing and new laws without losing focus on their core operations.

Its platform streamlines the entire accounting process for the clients, from building records to tracking sales and invoicing, to automating bank transactions and generating reports, the company added.

With its recent funding, Wafeq said it would build new product functionalities, acquire new customers and hire strategically across technical and non-technical roles.

“We are excited about what the platform [Wafeq] can achieve for businesses in the region and their ability to make a meaningful impact,” said Fadi Ghandour, managing partner at Wamda Capital, Wamda's sector-agnostic investment vehicle, which invests in high-growth technology and tech-enabled start-ups.

Wafeq also offers a standalone e-invoicing application programming interface or API, to customers while enabling businesses to stay compliant with e-invoicing regulations and maintaining their existing accounting software, the start-up said.

API is a software intermediary that allows two different applications to connect or communicate with each other. For example, each time users open a mobile app such as LinkedIn to send an instant message or to check market updates on their smartphone, they are using API.

“We are thrilled to back Wafeq as they solve a problem that impacts thousands of businesses in the region,” said Talal Alasmari, founding partner at Raed Ventures.

“The digitalisation of accounting practices will truly transform how SMEs here operate, increasing operational transparency, creating efficiencies and contributing to economic growth.”

Some of the Wafeq clients — who come from a diverse range of industries such as contracting, food and beverage, e-commerce and retail — include Tabby, Lean Technologies, Fenix, PiFlow, Ziina and Invygo.

Start-ups across the Middle East, Africa, Pakistan and Turkey raised $7.2 billion through 1,473 deals last year, despite macroeconomic and geopolitical uncertainty, according to a report by data platform Magnitt.

FinTech led both funding and a number of deals in the region, Magnitt found. The sector's funding reached $2.25 billion across 351 deals in 2022.