FlapKap, a fintech startup with origins in Egypt and operational headquarters in Abu Dhabi, has recently announced a significant milestone in its funding journey, securing a $34 million pre-Series A round. This substantial capital raise comes on the heels of a $3.6 million seed funding round nearly two years prior, bringing the total funds raised by the company to $37.6 million.
The latest funding round, a mix of debt and equity, was orchestrated by BECO Capital and attracted a considerable new investment from Pact VC. Additionally, existing investors A15 and Nclude, along with QED Investors, contributed to the round, and Channel Capital provided debt financing.
With this fresh influx of capital, FlapKap is poised to scale its financing services for small and medium enterprises (SMEs) across the expansive regions of the Middle East and North Africa (MENA) and the Gulf Cooperation Council (GCC). A portion of the investment will be strategically channeled into enhancing the fintech’s technological infrastructure, which will include the development and launch of specialized trade finance products for B2B businesses.
Established in 2022 by a quartet of entrepreneurs—Ahmad Coucha, Khaled Nassef, Sherif Bichara, and Kunal Harisinghani—FlapKap is dedicated to providing innovative financing solutions that are revenue-based and embedded within business operations. These solutions are particularly beneficial for SMEs in the eCommerce, retail, and restaurant sectors, enabling them to scale up their inventory and digital advertising efforts with immediate funding and the convenience of paying at a later time.
FlapKap’s services are designed to alleviate the financial challenges faced by many SMEs, which often have restricted access to conventional bank loans or venture capital. By streamlining the loan approval process, FlapKap offers a more accessible financial lifeline to these businesses.
CEO and Co-founder Ahmad Coucha emphasizes the role of data in enhancing the company’s ability to support SMEs, stating, “The growth in data has made it easier than ever to support SMEs.” He also highlighted the significance of the investment in supporting FlapKap’s growth within the UAE and Egypt, as well as its expansion plans for the rest of the GCC.
FlapKap’s approach is heavily reliant on data analytics, integrating data from diverse sources such as eCommerce platforms, social media, payment gateways, and bank accounts to evaluate loan applicants. The platform employs AI-driven models and leverages open banking to achieve precise underwriting while also reducing operational costs.
The company has broadened its offerings to cater to a wider array of SMEs, both online and offline. FlapKap boasts a rapid evaluation and approval process, claiming the ability to present financing offers to prospective companies within a 48-hour window after registration.
SMEs are a cornerstone of the economy in the MENA region, making up to 90% of all businesses. However, securing financial support remains a significant hurdle for many. FlapKap’s automated lending process is designed to address this issue, facilitating easier access to capital for SMEs.
FlapKap is determined to bridge the substantial SME financing gap in the MENA region, which the International Finance Corporation estimates at $180 billion. The platform has already demonstrated impressive growth, with quarter-on-quarter originations and disbursements doubling over the past two years. Additionally, FlapKap has established a robust network of merchants across Egypt and the UAE, indicating a strong market presence and the potential for further expansion.
