UAE-based startup Fintech Galaxy (FTG) has acquired Underlie, an Egyptian open banking platform that offers application programming interfaces (APIs) to banks and businesses, a company statement said Thursday. However, the value of the acquisition was not disclosed.
"Underlie’s expertise in building Open Banking APIs and knowledge of the local market will help (FTG) speed up our Egypt market penetration, boost the expansion in the region, and create new Open Banking/Open Finance-enabled use cases,” Riyadh Al Zamil, chairman of Fintech Galaxy’s board, said in the statement.
Open banking/finance is the approach that allows third-party financial service providers to access the bank's customers' data via APIs.
Egypt is becoming a fast-growing fintech hub bolstered by a 230% growth in cashless payments, FTG said. With almost 39 banks nationwide and a population of over 100 million, it presents an opportunity for fast-tracking the implementation of the Open API standard, positioning the country as a necessary crossroad in the company's open banking/open finance roadmap in the region, Al Zamil noted.
Fintech Galaxy, the first central bank-regulated open finance platform in the Middle East, is present in the UAE, Saudi Arabia, Bahrain, Egypt, Lebanon, and Moldova.
$250 million. This is the amount that has been injected into Egypt’s fintech and fintech-enabled startups in the last five years. It rose from about $900,000 in 2017 to $159 million in 2021, according to a February report released by the Central Bank of Egypt (CBE).
Fintech companies are gaining momentum in Egypt, driven by higher demand from a young and increasingly online-savvy population.
Total investments in the tech sector more than quadrupled to $159 million last year, up from $37.1 million in 2020, according to the Fintech Landscape report published by the central bank-backed initiative Fintech Egypt. The number of fintech startups receiving funding also grew to 32 last year, up from 25 a year earlier.
The report also showed that 30% of Egypt's 112 fintech or fintech-enabled startups operate in the payment and remittance space. Lending and alternative finance come second with 13%, followed by personal finance management and literacy, accounting and expense management, and payroll and benefits at 8% each.
In October, Egypt-based banking app Nexta secured $3 million of funding led by e-finance, which operates the Egyptian government’s financial network. Flapkap, an Egypt-based startup that offers revenue-based financing solutions to online businesses, also raised $2.4 million in a seed funding round.
