Dopay, an Egyptian fintech company specializing in digital payroll solutions for the unbanked and underbanked workforce in emerging markets, has successfully completed a $13.5 million Series A extension funding round. The round was led by Argentem Creek Partners, with additional contributions from existing investors.
The company intends to use the newly acquired funds to expedite its growth within Egypt, its primary market. Additionally, Dopay plans to introduce a variety of new financial services and broaden its platform’s capabilities to operate across multiple banks and countries.
Founded in 2014 by Frans van Eerse (CEO) and Roel Van Eersel, Dopay was created to address the challenges faced by unbanked and underbanked individuals in emerging economies. The platform enables employers to disburse digital payments directly to their employees and other recipients, thereby facilitating financial inclusion and reducing reliance on cash transactions.
In Egypt, where over 60% of the workforce predominantly uses cash for transactions, Dopay’s objectives are in line with the Egyptian Central Bank’s goals to digitize payments and enhance financial inclusion.
In August 2021, Dopay received a banking agent license from the Arab Banking Corporation Egypt (Bank ABC Egypt), which allowed the fintech to introduce a cutting-edge virtual banking platform. This platform provides businesses with the ability to instantly create accounts for their employees and beneficiaries, facilitating real-time payments in compliance with the Central Bank of Egypt’s regulations.
Following this development, Dopay secured an $18 million Series A funding round just a month later. The capital from this round was allocated to refine the company’s operations in Egypt and further develop its next-generation virtual banking platform.
The CEO of Dopay emphasized the significance of the recent funding, pointing out that it arrives at a pivotal time when the fintech sector is experiencing rapid expansion. He remarked that the investment will enable the startup to enhance its platform through collaborations with partner banks. Furthermore, the company plans to utilize the funds deposited on the platform to establish a self-sustaining lending model.
He also recognized the potential of this model to use the deposited funds to support a lending portfolio, which would contribute to a sustainable and mutually beneficial financial ecosystem. The CEO expressed excitement about the future, indicating that customers can anticipate the introduction of new financing products. These products are expected to be integrated seamlessly into the platform, thereby improving the overall user experience.
Additionally, Maarten Terlouw, the Co-Chief Investment Officer at Argentem Creek Partners, shared his perspective on the strategic approach of Dopay. He believes that focusing on payroll services is essential for bringing unbanked and underbanked workers in emerging markets into the fold of the formal financial system.
According to Terlouw, this payroll-centric model not only facilitates the establishment of long-term customer relationships but also provides a solid foundation for the cross-selling of various financial products.
