Egyptian Fintech Khazna Secures $16M in Pre-Series B Funding

18 Feb 2025

Khazna, a leading Egyptian fintech company, has successfully raised $16 million in pre-Series B funding, bringing its total investment to over $63 million. This new capital infusion will support the company's ambitious plans to apply for a digital banking license in Egypt and expand its operations into Saudi Arabia.

Khazna primarily targets workers earning significantly below Egypt's minimum wage, providing them with accessible financial tools tailored to their unique needs. Currently, approximately 100,000 users receive their salaries through Khazna, enabling the integration of additional financial services such as loans and insurance directly into payroll accounts.

For its additional 400,000 users, Khazna offers lending solutions that enhance credit access for gig workers and pensioners. The fintech's lending product has recently propelled the company toward profitability, demonstrating the effectiveness of its business model.

Over the past two and a half years, Khazna has concentrated on fortifying its core offerings, which include credit services for payroll and pension recipients, as well as unsecured loans for gig workers. This focused approach has been pivotal to the company's financial performance and long-term sustainability.

In addition to lending, Khazna provides a diverse range of services, including bill payments, buy now, pay later (BNPL) options, medical insurance, and a rent-to-own product. By embedding itself within the payroll and lending sectors, Khazna is strategically positioning itself to evolve into a fully digital bank catering to underserved communities in Egypt.

However, Khazna faces a significant challenge: the lack of access to customer deposits, which traditional banks utilize to fund loans. Currently, the company relies on wholesale debt financing in both U.S. dollars and Egyptian pounds to sustain its lending operations.

To mitigate borrowing costs and offer more affordable credit, Khazna is actively pursuing a deposit-taking license in Egypt. Securing this license would allow the company to accept customer deposits, thereby lowering its cost of funds and enhancing its financial model.

Gaining access to user deposits would provide Khazna with a competitive edge, enabling it to capture a larger market share while offering more attractive lending rates. The company aims to obtain the banking license from Egypt's Central Bank by mid-2026, following the regulatory framework introduced in July 2024.

In addition to strengthening its position in Egypt, Khazna is also setting its sights on the Saudi Arabian market, where demand for consumer finance solutions continues to grow. Unlike existing BNPL providers such as Tabby and Tamara, which focus primarily on short-term credit, Khazna plans to differentiate itself by offering medium-term financial products, including earned wage access (EWA), payroll-backed lending, and pension-based credit.

With this latest funding round, Khazna is poised to expand its reach and enhance its service offerings, further solidifying its role as a key player in the fintech landscape of Egypt and beyond.

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