FlapKap's Strategic Funding Success
Egypt-born and Abu Dhabi-based fintech platform FlapKap has secured $34 million in a pre-Series A funding round, nearly doubling its financial backing just two years after a successful seed round. This latest funding round, which brings the company's total funding to $37.6 million, signals strong investor confidence in FlapKap's vision and potential.
Leading Investors and Strategic Goals
The funding round was a mix of debt and equity financing, led by BECO Capital. New investments from Pact VC and follow-on contributions from A15, Nclude, QED Investors, and Channel Capital further bolstered the round. FlapKap plans to leverage this substantial investment to expand its SME financing services across the Middle East and North Africa (MENA) and the Gulf Cooperation Council (GCC) regions.
Focus on SME Financing
FlapKap's new funding will primarily support the expansion of its small and medium enterprise (SME) financing services, addressing a critical need in the MENA and GCC regions. The fintech also aims to optimize its technology infrastructure, introducing trade finance products specifically tailored for B2B businesses. This strategic expansion is in line with FlapKap's mission to provide accessible financing solutions to SMEs, particularly those in eCommerce, retail, and the restaurant industry.
Addressing SME Challenges
Co-founded in 2022 by Ahmad Coucha, Khaled Nassef, Sherif Bichara, and Kunal Harisinghani, FlapKap was created to solve the financial challenges faced by SMEs, especially those with limited access to traditional bank loans or venture capital. The platform offers revenue-based and embedded financing solutions, enabling these businesses to scale their operations, particularly in inventory management and digital advertising, with the flexibility to pay later.
Leveraging AI and Open Banking
FlapKap’s approach is heavily data-driven, integrating unconventional data sources from eCommerce sites, social media, payment gateways, and bank accounts to assess applicants. The fintech employs AI-powered models and open banking technology to provide accurate underwriting, significantly reducing operating costs and streamlining the loan approval process. This method allows the platform to evaluate, approve, and present offers to prospective companies within 48 hours of signup.
Supporting SMEs in the MENA and GCC Regions
SMEs represent up to 90% of all businesses in most MENA countries, yet many struggle to secure the necessary financial support to grow. FlapKap addresses this by automating the lending process, making it easier for SMEs to access the funds they need. According to the International Finance Corporation, the SME financing gap in the MENA region is estimated at $180 billion. FlapKap is determined to close this gap, having already doubled its quarter-on-quarter originations and disbursements over the past two years while building a strong network of merchants across Egypt and the UAE.
Scaling for Greater Impact
With the new funding, FlapKap aims to continue its growth trajectory and expand its reach within the MENA and GCC regions. The company’s commitment to supporting SMEs through innovative financing solutions is set to have a significant impact on the economic landscape of these regions, helping to bridge the financing gap and empower businesses to achieve their full potential.
