The Dubai International Financial Center announced on June 8, 2020, that they have invested in fintech firms within the UAE. The investment in question involved four firms- FlexxPay, Go Rise, NOW Money, and Sarwa. This is part of a larger scheme launched in 2019 to invest $100 million in fintech firms seeking access to the Middle Eastern, African, and South Asian (MEASA) markets.
DIFC’s Efforts to Support Fintech Development
The companies mentioned will be receiving pre-series A to Series A funding, and more firms are also under consideration from the center. According to the official announcement, more recipients will be announced in the near future. This, the center says, is a reinforcement of their commitment to fintech within the region.
Arif Amiri, the Chief Executive Officer of the DIFC Authority, stated that these efforts are in a bid to strengthen Dubai’s position within fintech. The city is widely considered a one of the top ten fintech hubs, and this fund will help accelerate the growth of firms in the region. The fund, which was first launched in 2019, involved a screening process for interested companies.
Startups that applied were subjected to a screening process by the DIFC FinTech Fund. Following this, four companies were shortlisted to receive the funding, with others to follow soon. The companies selected are also all in the initial and growth stage.
Who did DIFC Invest in?
The first company selected is FlexxPay, which is an employee benefits firm. This B2B platform enables employees to instantly access their earned income and benefits. FlexxPay is also a cloud-hosted platform for better convenience.
The second company that was chosen is GoRise, a fintech platform targeting global migrants. The platform offers migrants the opportunity to access financial products in domicile as well as in their home countries. The platform is targeting around 250 million migrants worldwide.
The third company to receive this funding is NOW Money, which provides payroll services to Gulf-based companies. Furthermore, they provide access to accounts using mobile apps and physical cards and remittance for lower-paid workers. The last firm receiving grants is Sarwa, which is described as a robo-advisory wealth management firm.
Michael Truschler, the CEO of FlexxPay, stated that the company is grateful for the support from DIFC’s FinTech Fund. He also mentioned that the company looks forward to a future where everyone may access their income at any time with ease.
Padmini Gupta, the CEO of Go Rise, echoed similar sentiments when speaking on the matter. According to her, migrant workers are one of the biggest assets of the region and earn $150 billion a year. Go Rise, she says, wants to help them better manage their income through strategic partnerships.
Cryptocurrency and Blockchain in the Middle East
These developments speak to the increased support for fintech within the Middle East, and this goes beyond DIFC’s FinTech Fund. A number of innovative business solutions are cropping up that embrace many aspects of fintech such as blockchain and digital assets. In September 2019, for instance, Dubai-based venture capital firm, ASA, partnered with blockchain investment company, IBC Group Limited.
The partnership was to facilitate the launch of a Security Token Offering for the tokenization of real estate in the region. This included a 200-apartment vacation rental portfolio.
It has not necessarily been all smooth sailing, however. In January 2020, it was reported that cryptocurrency-related activities were banned in the Qatar financial center. However, security-related activities, such as security tokens, remained unaffected by the law.
Do you think Dubai will remain one of the top ten fintech hubs moving forward? Will cryptocurrency be re-introduced to the Qatar market? Let us know your thoughts below.