By Oliver Smith on Monday 31 October 2022
The Series B will help MoneyFellows to grow across Africa and Asia where informal savings associations are most popular.
Cairo-based fintech MoneyFellows has raised $31m as part of a Series B funding round to fund the growth of its app which helps friends and families to run savings associations.
MoneyFellows essentially digitises what’s known as “Gam’eya”, an informal savings method where friends and families will pay into a shared pot each month and take turns to use the proceeds of the pot.
A host of new investors are backing the fintech, including CommerzVentures, Middle East Venture Partners, Invenfin, National Investment Company and Arzan Venture Capital, along with existing backers Partech, Sawari Ventures, 4DX and P1Ventures.
“The support we received from leading local and global venture capital firms in times of instability and scarcity of growth capital rounds is a testament to their faith and confidence in our business model, our team and the overall opportunity that lies in the Egyptian market,” said Ahmed Wadi, CEO and founder of MoneyFellows.
MoneyFellows says some 2.4 billion people use money circles, also known as “chit fund” in India, worldwide.
The app makes its money by charging users a percentage of the amount of money they pay into a circle, but also offers to keep the pots in a savings account with interest that recoups some of that cost.
While money circles are typically informal and based on trust, MoneyFellows also adds a credit assessment and legally binding contract to ensure that payments are made, with the fintech covering the share of a failed payment to ensure users get their full payout.