In a significant milestone, UAE-based fintech startup Ziina has raised $22 million in a Series A funding round. This round, led by U.S.-based Altos Ventures, also saw participation from several prominent investors, including FinTech Collective, Avenir Growth, Activant Capital, Y Combinator, FJ Labs, Middle East Venture Partners (MEVP), and Jabbar Internet Group. The substantial investment will fuel Ziina’s ambitious plans to expand its offerings beyond a payments solution, transforming it into a comprehensive financial services provider for both businesses and consumers in the Middle East.

Ziina's Evolution and Growth

Founded in 2020 by Faisal Toukan and Sarah Toukan, Ziina initially launched as a peer-to-peer (P2P) payment app, enabling users to send and receive money using only a phone number, eliminating the need for IBAN or Swift Code. The fintech's early success was marked by its inclusion in Y Combinator's first cohort of 2021, where it secured $7.5 million in seed funding. Following the launch of its app to 20,000 retail customers in June 2021, Ziina quickly gained traction, attracting a wide user base interested in splitting bills for group activities.

Over the past three years, Ziina has expanded its services to cater to the needs of micro, small, and medium-sized enterprises (SMEs) in the UAE. Today, the platform boasts 50,000 retail and business customers, offering a range of payment solutions, including a payment gateway integrated with e-commerce platforms like WooCommerce and Shopify, point-of-sale (POS) systems, and QR code-based payment options. This strategic pivot towards SMEs, a segment that represents over 94% of all companies in the UAE and contributes approximately 60% of the nation's GDP, has been instrumental in the startup's rapid growth.

Key Factors Driving Investor Interest

The $22 million Series A funding round, particularly impressive given the global slowdown in fintech funding, underscores investors' confidence in Ziina's trajectory. According to co-founder and CEO Faisal Toukan, three critical factors contributed to this strong investor interest: the rapidly expanding SME segment in the UAE, Ziina’s focus on product-led growth, and its recent acquisition of a Stored Value Facility (SVF) license from the Central Bank of the UAE.

Toukan emphasized that the underserved SME market in the UAE is experiencing a surge in demand for digital payment solutions, with around 77% of SMEs having integrated such systems as of 2023. Ziina's platform has addressed this demand by offering accessible, transparent, and user-friendly financial tools, helping businesses streamline payment processes, enhance customer interactions, and manage cash flow more effectively.

From a product standpoint, Ziina has seen remarkable growth, driven largely by its innovative approach to addressing the pain points of SMEs. Over the last year, the company has reported a 34% month-over-month increase in customer numbers and a tenfold increase in revenue. This growth has been achieved primarily through organic means, with 55% of new customers coming through word-of-mouth and B2B referrals, underscoring the platform's strong market fit and the effectiveness of its product-led growth strategy.

Ziina's Strategic Vision and Future Plans

Ziina’s recent acquisition of the SVF license is a pivotal development that has enabled the company to broaden its financial services offering. This license positions Ziina as the first venture-backed fintech in the UAE with the capability to provide a full suite of financial solutions, excluding lending, which requires a separate license. The upcoming launch of the ZiiCard, a card product aimed at enhancing expense management for businesses and individuals, marks the next step in Ziina's evolution. The ZiiCard will allow users to manage their finances more effectively by providing instant access to digital wallet balances and offering features such as expense categorization and payment splitting.

As Ziina continues to scale, the company is bolstering its team by onboarding experienced professionals from global tech giants such as Revolut and Nubank. This strategic move is aimed at accelerating the company's growth and expanding its footprint across the Middle East, with future market entries planned for Saudi Arabia and Jordan.

Ziina’s $22 million Series A funding round represents a significant vote of confidence in its mission to transform the financial services landscape in the Middle East. With a rapidly growing customer base, a newly acquired SVF license, and strong investor backing, Ziina is well-positioned to become a leading financial platform in the region. As it moves forward, Ziina aims to leverage its innovative product offerings and strategic market positioning to drive economic empowerment and foster a cashless society across the Middle East. The fintech’s journey, marked by its evolution from a simple P2P payment app to an all-encompassing financial ecosystem, is a testament to the vast potential that lies ahead for Ziina in the region.