Nexta, an Egyptian startup that plans to launch its banking app in the coming months, has secured a $3 million investment from eFinance Group, a state-owned provider of digital payments solutions. This news follows the $2 million pre-seed round Nexta announced this March, which Egyptian early-stage VC Disruptech led.
Last year, Nexta obtained a provisional license from the Central Bank of Egypt (CBE) and will look to fulfill further requirements and meet certain obligations before obtaining the CBE’s final approval for the agent banking license it needs to launch its services in the country. The Nexta app will have a partner bank to handle settlements and act as an intermediary between itself and the CBE — however, it’ll power its cards and tech.
Founded by Ahmed Hisham in 2021, Nexta wants to disrupt the Egyptian fintech scene with its “next-generation banking” app and card. According to the company, the Nexta card will aggregate users’ existing payment cards, allowing more effortless money transfer and tracking spending, among other features.
“We’re trying to build next-generation banking and provide a seamless user experience to the consumer. We want to make easy and instant onboarding, card aggregation, linking all of your cards and several methods of cash-in features,” the co-founder and CEO told TechCrunch in an interview, adding that the company plans to make revenue from interchange fees. “That’s the first thing we are going in with the soft launch, and budgeting and tracking spending. And then we’ll add more features every month or quarter more features to solve the pinpoints of Egyptians.”
Egypt is among the highest consumer spending markets across Africa. It is also one of the region’s most cash-reliant markets, meaning there’s an immense opportunity for fintechs to bring consumers spending online by launching card services. Egyptians looking for fresh alternatives that do not include telco-powered mobile wallets and digital channels from legacy banks can turn to Nexta and Telda, the Sequoia-backed fintech that announced a $20 million seed round last week.
Unlike Telda, which allowed signups from its yet-to-be-launched apps (it didn’t bode well with its over 30,000 users after waiting almost a year to use the app), Nexta has limited its waitlist to signups from its website, engaging them through content marketing in preparation for its launch. Hisham declined to reveal how many subscribers are on the company’s waitlist.
Like Sabbah, in an interview with TechCrunch last week, Hisham agrees that both consumer-facing fintech apps ultimately compete with cash. “I believe that the competition is very healthy and thanks to Telda for the awareness they made to consumers and taking the first step. The Egyptian market needs not only Telda and Nexta but four or five other players like us,” the CEO added.
In a statement, Ibrahim Sarhan, eFinance’s chairman and CEO, said the investment in Nexta is in line with Egypt’s digital transformation plan and vision for 2030, including the Group’s plan to maximize its assets and investments by investing in the fintech space. “Nexta is among the promising companies financed by the Group within several targeted investments,” Sahar said. “It’s worth noting that the Group took part in establishing Nclude — an investment fund — to invest in emerging fintech companies, thus improving the current and future direction of fintech in Egypt.”
Hisham, who describes this investment as a strategic partnership rather than a funding round, said Nexta is glad to have e-finance on board as the demand for financial services in Egypt increases. “We believe there is a huge opportunity for us to offer a differentiated and outstanding experience to different users in such a promising market,” he said.
Proceeds from the investment will help Nexta prepare for its launch, hire talent and invest in its technology.
Update: This report was updated with a correction to the amount Next raised: $3 million instead of $5 million.