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While most African digital loaner depend on work capital to fuel growth , MoneyFellowshas quietly done what few others have : impart billions of Egyptian pounds with almost no debt or balance sheet exposure .
Now , after get up $ 13 million in a pre - Series C round led by Casablanca - based Al Mada Ventures and DPI ’s Nclude Fund , the Cairo - based fintech says it ’s ready to tilt from steady increase to regional enlargement .
The round , which also drew participation from Partech Africa and CommerzVentures , brings the company ’s full financial support to just over $ 60 million .
Founder and CEOAhmed Wadinotes that , unlike fintechs burn through cash to scale , the inauguration has keep operations thin while digitalize one of the earth ’s old financial systems : the rotating savings and credit association ( ROSCA ) .
“ We have pull off to break through this model and reach profitableness , ” said Wadi . “ Doing this while bestow out billions without trust on working capital at all is quite tumultuous in itself . ”
ROSCAs are informal savings grouping where a sterilize telephone number of participants contribute on a regular basis to a shared pool , which ante up out to one member per cycle per second . Common across emerging markets , they go by different names : “ esusu ” or “ ajo ” in Nigeria , “ kameti ” or “ chit ” fund in India , and “ gam’eya ” in Egypt .
Here ’s how itworks : Say 10 masses each impart $ 1,000 a month . Every calendar month , one person receive the full $ 10,000 . The wheel repeats until everyone gets a payout . While these groups work best within trusted circles , their offline nature limits access and scalability .
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MoneyFellows , launch in 2016 , digitizes this model by spread out access code to a broader syndicate of users across the country . Through its app , anyone can form or connect ROSCA groups or “ set . ” Similar models exist globally with Pakistan’sOraanand the U.K.’sStepLadder .
Rather than represent as a lender , MoneyFellows matches savers ( normally last in line ) and borrower ( typically first in argumentation ) using behavioral information , recognition scores , and income tier .
This approach allows it to descale without bring from its balance tabloid ; the society only step in when a ROSCA grouping has an unfilled slot , according to Wadi .
“ If we run roundabout of 10 people each and only find nine member for some , we pace in to fund the missing one , ” explains Wadi , who try out the ROSCA model in Germany and the U.K. before launch in Egypt . “ Instead of call off the chemical group , we finance one slot , which activates and monetize the remaining nine . ”
In a distinctive lending business organization , a caller has to borrow money from banks or other financial mental hospital to impart it out , most of the time incur interest price and default option peril .
However , in MoneyFellows ’ case , the jeopardy and funding are spread across its users , keep the proportion of unfilled Rosca slots under 10 % . In comparing , buy now , pay later ( BNPL ) providers and digital lenders often have full working capital exposure on their loanword books .
“ Today , only 7 - 8 % of slot in active Roscas require us to maltreat in with do work Washington , ” Wadi take note .
Such photo may be low in percentage terms , but as MoneyFellows scales , it supply up . Hence why the company , which raised this financial support as a bridgework to a much larger Series C round planned for next year , is also in advanced give-and-take with local banks to secure work capital in its bidding to maturate its “ circles ” much faster .
Operating profitably and expanding outside Egypt
MoneyFellows says it has reach out profitableness in Egypt , placing it among a small group of African fintech startup operating in the black .
Since launching in 2018 , the platform has mature to over 8.5 million users , up from 4.5 million at itslast funding milestone . The average payout per user has nearly doubled in the preceding two and a half years , from 23,000 EGP ( $ 453 ) to 45,000 EGP ( $ 906 ) , with strong espousal among high - income segments .
“ This model is naturally viral , ” Wadi enounce of the inauguration ’s growing . “ If you digitize the experience for two members of an offline ROSCA , they often bring the other eight with them . That kind of constituent growth is concentrated to beat . ” private-enterprise borrowing rates , he add together , have also helped accelerate adoption .
in the beginning this year , MoneyFellows plunge a plug-in product that let drug user to experience payouts , riposte installment , and spend across a merchant connection .
The 8 - yr - old fintech also plans to introduce investment , payroll department , indemnity , and remittal mathematical product down the telephone line , moves that put MoneyFellows in rival with other Egyptian digital banks like Lucky , Khazna , and Telda .
Its next exam will be replicating its success beyond Egypt , an ambition Wadi first voiced in 2022 . He admit that expansion took longer than expected due to the model ’s complexity , which the company choose to refine before going regional .
Digitizing ROSCAs is n’t as straightforward as launching a savings or loanword product . According to him , the summons involves work up recommendation engine to match users to the proper slots , equilibrize thousands of circles in real time , and minimizing nonpayment and dropout risk of exposure , all while keep user cartel .
“ Cracking the manakin assume longer than we cerebrate , ” Wadi remarked . “ But it was deserving the metre . Most attempts to scale Roscas digitally , even by banks and telco globally , have failed because they underestimated how complex the underlying behavior is . ”
After nearly a decennium rarify its model in one of Africa ’s great fintech market , partnering with over 350 local and regional entity and facilitate more than $ 50 million in investments , MoneyFellows project to launch in Morocco by class remainder , having secured cardinal partnership and regulative approvals .
Morocco offers conversant ground : a big unbanked population , a strong cozy nest egg culture ( known locally as “ daret ” ) , and a regulator - friendly environment . MoneyFellows is also betting that events like the 2030 FIFA World Cup will accelerate digital acceptation in the country .
The company is also eyeing other African and South Asian markets with similar kinetics . However , insert more diverse market will screen the poser ’s adaptability in regions where loose finance is less culturally relevant or formal banking is more entrenched .
“ ROSCA ’s ( splay Savings and Credit Association ) are very old financial arrangements , with roots break back century , if not 1000 of years , ” sound out Omar Laalej , managing music director at Al Mada Ventures . “ AMV was impressed by the modernized version of this business that Money Fellows was able-bodied to build , positively impacting thousand of fellowship in Egypt . ”
