Egyptian fintech startup Telda, which has garnered support from prominent global investors including Sequoia Capital, has made a significant move by acquiring the local securities brokerage firm City Capital. This acquisition represents a crucial step in Telda’s ambition to evolve into a comprehensive digital financial services platform. The announcement follows a landmark regulatory approval from the Financial Regulatory Authority (FRA), which has granted Telda Securities Brokerage the license to operate using financial technology across all relevant sectors for the first time in Egypt.
This strategic acquisition positions Telda as the first application in the Egyptian market to seamlessly integrate prepaid card issuance, payment services, money transfers, and stock and mutual fund trading within a single user interface. This development is expected to democratize investment opportunities in the Egyptian Stock Exchange (EGX), potentially attracting millions of new customers who can now buy and sell equities directly through the Telda app.
Founded in 2022 by Ahmed Sabbah and Youssef Shalqami, Telda initially focused on providing digital spending accounts and payment solutions tailored for millennials and Generation Z. The company quickly gained traction, securing $20 million in seed funding within the same year, with contributions from Global Founders Capital (GFC) and Block Inc. (formerly Square), alongside Sequoia. By 2023, Telda reported impressive growth, with 1.5 million app downloads, 500,000 active users, and transactions totaling $300 million, showcasing a strong demand for its digital-first approach to financial services.
The newly acquired brokerage license signifies a major expansion of Telda’s offerings, aligning with its mission to transform how individuals in the Middle East, North Africa, and Pakistan (MENAP) region engage with their finances. “Telda is on a mission to simplify financial services for Egyptians and facilitate payments in their daily lives,” stated CEO Ahmed Sabbah. “By adding stock trading to the app, we are making investment opportunities accessible to millions of Egyptians.”
While the financial details of the City Capital acquisition remain undisclosed, this move equips Telda with the necessary infrastructure and expertise to provide brokerage services. As a licensed securities brokerage firm, City Capital already operates within the regulatory framework of the EGX, allowing Telda to bypass the lengthy process of establishing a brokerage operation independently.
Youssef Shalqami, Telda’s Chief Technology Officer, hinted at further innovations on the horizon, suggesting that this acquisition is “just the beginning of more innovations to come.” Hisham Ibrahim, Managing Director of Tilda Holding for Financial Investments in Egypt, emphasized the strategic significance of this step, noting that it is part of Telda’s broader ambition to become a “comprehensive destination for providing all non-banking financial services through financial technology.” He also acknowledged the FRA’s support in facilitating Telda’s service expansion.
The FRA’s decision to grant Telda Securities Brokerage a full fintech license is a noteworthy development for the Egyptian financial landscape. It reflects a growing willingness among regulators to embrace technological innovation and facilitate the entry of new players into traditionally established sectors like brokerage. This regulatory shift could encourage other fintech companies to pursue similar expansions, fostering greater competition and innovation within the Egyptian financial services market.
According to Telda, the timing of this expansion aligns with a rising interest among Egyptians in managing and investing their finances. The company is banking on the user-friendly interface of its app to attract both seasoned investors and newcomers seeking a convenient and accessible way to engage with the Egyptian stock market.
Telda’s rapid growth and strategic initiatives underscore the increasing dynamism of the Egyptian fintech sector. The backing of renowned international investors like Sequoia Capital highlights the potential they see in the market and in Telda’s vision. Sequoia Capital, known for its early investments in tech giants such as Apple, Google, and WhatsApp, has been increasingly active in emerging markets, recognizing the opportunities presented by digitally savvy populations and evolving regulatory environments.
The integration of brokerage services into Telda’s existing platform could significantly impact retail investment in Egypt. By lowering barriers to entry, such as the need for traditional brokerage accounts and complex trading platforms, Telda could encourage broader participation from a wider segment of the population, potentially enhancing liquidity and activity on the EGX.
Telda’s acquisition of City Capital and the accompanying regulatory approval mark a pivotal moment for both the company and the broader Egyptian fintech ecosystem. As the first platform to offer a fully integrated suite of digital payment and investment services, Telda is well-positioned to capitalize on the growing demand for accessible and user-friendly financial solutions in Egypt.
