Capiter’s Marwan Elshayeb, Co-founder/COO Ahmed Nouh, Co-founder/CEO Mahmoud Nouh, Hassan El-Tahan

WHY WE INVESTED

How Capiter brought Quona into the Egyptian Fintech Market

Advanced tech, a growing economy, and smart regulatory developments make Egypt an ideal fit for Quona’s MENA expansion.

Why Egypt? Why now?

For Quona, the move to begin investing in Egypt comes from a confluence of forces. The second largest market on the African continent and the largest in MENA, the country has a highly educated and forward-thinking population. As importantly, its market is sophisticated, with regulators looking strategically at successful regulatory models like India’s to help accelerate the country’s digitization. “The central bank of Egypt and the FRA have been incredibly thoughtful in terms of proactively going out to learn from other models, regulators and ecosystems,” says Engel. “On every technical and strategic front, they’ve done a phenomenal job creating an enabling environment for fintech that expands access and quality of financial services for the underserved.”

Serving an unmet need

After Nouh and his co-founders launched Swvl in 2017, it quickly became apparent to him how dysfunctional the entire retail financing payment system was. “There is no one actually serving the businesses,” says Nouh. “The big pain SMEs are having is how do they get products, and how do they pay for them?”

A data-driven approach

While there are other players in the market who have been around for longer than Capiter, the company’s focus on logistics, its integration of financial services into an e-commerce model, and its smart use of data really set it apart. By developing sophisticated algorithms, the company uses data to lower delivery costs and place banner ads more effectively. “Unlike most other incumbents, Capiter can give you specific KPI-driven answers to how they are leveraging the data they collect,” says Engel.

A hybrid model

Another factor that sets Capiter apart in the region is its hybrid operations model — a strategy used by sophisticated e-commerce players like Amazon. “A lot of the other incumbents are focused on being very capital-light, but if there are breakdowns in delivery or fulfillments are late, these small mom and pop shops are going to drop the service,” says Engel. “What Capiter is doing is a really smart way of not being too asset-heavy, but also realizing you still need to invest.”

Goals for future growth

Rapid scalability has certainly been front and center for Capiter over the past year. While the company had a team of less than 100 last December, today its team is more than 1,000 employees across operations, logistics and sales. The engineering team alone has 60 people and Capiter has plans to open another engineering office in India. “We are trying to double-down on our engineering because that’s what keeps us growing very fast,” says Nouh.

Quona Capital is a venture firm specializing in financial technology for inclusion in emerging markets. Learn more at quona.com.