“Necessity is the mother of invention.”
The famous saying fits well in the case of Lebanese entrepreneur Nadim Alameddine, founder of Wafeq — a Dubai-based software-as-a-service (SaaS) start-up.
Founded in 2019, Wafeq is a digital platform that aims to address the unmet finance and accounting needs of small and medium enterprises in the Middle East region.
Mr Alameddine first noticed the market gap and the potential opportunity in 2018 when the UAE government introduced VAT.
“I had to set up the accounting framework for my first start-up on my own to be able to file the VAT returns … I realised there is no strong, localised accounting software brand for our region like there was in other mature markets,” Mr Alameddine, who is also the chief executive of the company, tells The National.
“I researched the opportunity further and it became clear that the market for it will be very large. That’s when I decided to launch Wafeq.”
However, it was not an easy journey for Mr Alameddine, 41, who holds a master's degree in business administration from the Wharton School of Management, to set up Wafeq.
It took more than three years of continuous trials before the company launched its first product in the market late last year.
“Developing an accounting software takes a long time … we could not go live with a basic solution … so we had to put in a lot of time and effort to get to a stage where we felt comfortable to launch,” Mr Alameddine says.
“In the start-up world, that is usually not the best approach but due to the nature of our product we had to do it this way.
“We were also very cautious about going to the investors until we had validated the product with customers and seen some early traction.”
There are about four million SMEs in the GCC and Egypt, says Mr Alameddine, with demand for accounting software growing exponentially.
“We are still [in] very early days in terms of SaaS adoption in the region and are therefore very bullish on the long-term outlook … for Wafeq, the opportunity is in building a product that is made entirely for the Middle East, in the Middle East,” he says.
“We have a solid understanding of the needs of local businesses and are well placed to disrupt this sector.
“Legacy platforms are unable to keep up with the changes in accounting regulations and this is where Wafeq as a home-grown platform is able to move them fast.”
Mr Alameddine, who has previously worked in companies such as Accenture and Dubizzle, earlier co-founded an online shopping search engine Pricena in 2013.
founder and chief executive, Wafeq
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.
The FinTech sector led in terms of funding and the number of deals in the region, Magnitt found. The sector's funding stood at $2.25 billion across 351 deals in 2022.
With the changes in taxation and reporting regulations, small businesses and start-ups need to stay on top of the compliance requirements.
Wafeq is working to meet the requirements of the tax authorities in the UAE and Saudi Arabia — the Arab world’s biggest economies — and Egypt, the region’s most populous market.
It is also supporting initiatives such as e-invoicing, which are becoming mandatory in some countries.
“We have also built a custom API, allowing large businesses to connect to their legacy accounting software, so that they can benefit from the best of what Wafeq has to offer,” Mr Alameddine says.
An API — short for application programming interface — 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.
Wafeq, which was bootstrapped initially with the founder’s own capital, raised $3 million in its latest funding round in January.
The investment round was led by Riyadh venture capital firm Raed Ventures with the participation of Wamda, which aims to accelerate entrepreneurship ecosystems across the Mena region.
“Following the investment round, we are focusing on our expansion into Egypt, a market with a lot of potential … we are also doubling down on our presence in the UAE and Saudi Arabia,” Mr Alameddine says.
The start-up is in no hurry to raise new capital.
“We are a financially prudent business … we have already raised what we required … our clients and revenue pipeline remains strong, which reduces the need for constant fund-raising,” Mr Alameddine says.
There is also no plan to exit the business as the founder intends to establish it in the long term with a strong foundation.
“Our goal is to build an amazing brand that is loved by SMEs and that helps them to run their business better. We are not building a company to exit — we are building a brand to last.”
Businesses using Wafeq generate more than 630,000 invoices every month, with total monthly invoiced amounts exceeding $117 million, according to the company.
The company claims its technology helps businesses to 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.
Wafeq, which is currently not prioritising profitability, has no plans to enter the business-to-consumer segment.
“We are currently focused on investing heavily in product development and marketing to take advantage of the surge in accounting software demand and focus on growing our customer base,” Mr Alameddine says.
“We are built for businesses and that will remain our focus as of now. The problem we are solving is very large, and as we grow we can create impact across various sectors.”
Some of Wafeq's clients — who come from a diverse range of industries such as contracting, food and beverages, e-commerce and retail — include Tabby, Lean Technologies, Fenix, PiFlow, Ziina and Invygo.
Q&A: Nadim Alameddine, Wafeq’s founder and chief executive
Where do you see yourself 10 years from now?
Our goal is simple yet ambitious … to become the number one accounting software in the region. With our dedicated team and innovative solutions, we are confident that we can achieve this goal and provide unparalleled customer support.
Are you a risk-taker or a cautious entrepreneur?
There is this myth that entrepreneurs are huge risk takers. The reality is that what may appear to be a big risk from the outside is often a “controlled” risk for the entrepreneur. Sometimes, you need to take some risks and if the consequences are irreversible, that is when you need to spend more time calculating.
If you could change one thing in your entrepreneurial journey, what would it be?
I definitely wish I had started working in the technology sector straight out of the university instead of going into consulting. But as they say, hindsight is 20/20 and I have no regrets.
Are you on a hiring spree?
Currently, we have 18 employees. We are hiring across all three markets — the UAE, Saudi Arabia and Egypt — as per the business requirements, in technical and non-technical roles.
What successful start-ups do you wish you'd started and why?
Stripe is one of the companies I admire the most. The quality of their product and the experience they deliver to their customers is truly exceptional.
What new skills have you learnt in the process of launching your start-up?
As a solo founder, I had to learn to code to build the first version of Wafeq. My engineering education definitely made things easier, but I do remember spending so many hours in the evenings after work learning web programming. It is an empowering skill for anyone building a technology company.
How has Covid-19 affected your business?
We actually launched our product in late 2022 after most of the pandemic had passed. Before that, we were developing the product, so we were not affected by the pandemic.
What is your mantra for success?
Whenever you are faced with two ways to do something, pick the hardest one.
Who is your role model?
The entrepreneurs I admire are those who have successfully started several businesses … I truly admire repeat founders — these are the people who have truly understood how to do it and how to cause positive disruption.
