With the massive sums of money that get invested in fintech startups every year in the MENA region, it would make sense that some interesting concepts and ideas would arise.
A particularly interesting offshoot of this understandably massive sector is alternative financing. Essentially, it involves offering funds on the B2B and/or B2C level that are available outside of the standard banking system. Say you need a loan or some credit; with alternative financing, your bank is no longer your only lifeline. In a region where banks have been historically quite traditional, this gives both customers and businesses access to finance in new, easy and efficient ways.
We have compiled below a list of 5 UAE-based startups that are offering their own take on alternative financing across various verticals and demographics.
Monthly salaries have been a staple of the corporate world for many decades now, but we rarely question their viability, especially in the modern age. Life is more expensive than ever, and unexpected medical bills and other emergencies can put a toll on the most financially savvy of employees.
But what if an employee was able to withdraw a portion of their salary that they’ve earned so far? This is the service that FlexxPay is offering. The company is working to fix the pay frequency problem at its root by providing businesses and their employees with an instant pay platform that seamlessly integrates with a company’s payroll system. The company makes money by charging a fixed transaction fee each time its services are leveraged by an employee.
Just like the banking sector, the real estate industry remains quite traditional. Bring the two together, and the challenges simply compound.
Huspy, an Abu Dhabi-based proptech, has stepped up to simplify things by offering an app-based marketplace for residential mortgage loans, and overall simplifying the home financing process.
It seems Huspy’s services are offering a much-needed solution, as the company has seen significant attention from investors since launching in 2020. Currently at the Series A stage, it has raised $47 million to date.
Putting a child through school is no easy feat, especially when it comes to rising annual fees. Zenda is offering a fresh twist on the Buy Now, Pay Later model, applying it to the school financing system.
Zenda addresses pain points around the payment of school fees - in particular, the lack of convenience and flexibility in payment options for parents and the poor collection of payments for schools. Using zenda, families can track dues and make payments through a multitude of pay-now and pay-later options, and unlock rewards for paying on time. Zenda integrates with schools through its proprietary data model and APIs and eliminates last-mile reconciliation challenges and delays.
The company has witnessed strong market traction since launching in 2021, crossing $100m+ in annual contracted Total Payment Volume by Q4 of that year, across UAE and India.
SMEs in Abu Dhabi have enjoyed a wealth of new support over the past few years, as the leadership of the emirate strives towards growing the business ecosystem. On the private side of things, we’ve seen some companies rise to meet the aspirations of the Abu Dhabi government, working to contribute to the ecosystem in their own right. Among these is the relatively new company LNNDO.
LNDDO is the region’s first ADGM-licensed digital lender for SMEs, offering quick and easy financial support across the UAE.
The company provides loans for small businesses with a quick and easy approval process, even if they do not have audited financial statements. Historically, applying for a small business loan in the UAE was a lengthy and complicated process, taking six to eight weeks and reams of documentation. With its platform, LNDDO has noted, the loans decision process takes only a matter of minutes, and funds can be disbursed and made accessible within one week.
The oldest among the startups on this list, a lot has already been said about Beehive. The award-winning company offers a peer-to-peer (P2P) online lending platform that directly connects creditworthy businesses looking for funding with investors looking to support their growth, giving them an alternative financing option.
P2P lending is a form of crowdfunding and refers to investors providing finance to businesses without the use of a conventional intermediary, such as a bank. P2P lending uses the internet as a platform to reach a crowd of hundreds of potential investors, as is the case with Beehive.