UAE-based Fintech for Small Businesses, Ziina, Secures $22M Amid Surging Growth

In the summer of 2021, Ziina hit a significant milestone by launching a financial technology application for 20,000 retail clients, following its successful participation in Y Combinator’s first batch of the year and a $7.5 million seed funding round.

Fast forward three years, the fintech enterprise based in Dubai, having broadened its services to cater to the unique demands of micro, small, and medium enterprises (SMEs) in the UAE, has grown its customer base to 50,000 across retail and business sectors. This expansion fuelled a successful Series A funding round, drawing $22 million, led by Altos Ventures.

This considerable infusion of funds, especially during a time when global investments have slowed, highlights the trust investors place in the company’s trajectory. Notably, the enterprise reported a remarkable 34% month-over-month customer growth in the preceding year, alongside a ten-fold revenue increase.

Faisal Toukan, the co-founder and CEO, shared with TechCrunch the trio of aspects making Ziina an attractive proposition for investors: the burgeoning SME market in the UAE, the company’s emphasis on product-led growth, and the acquisition of a vital central bank license.

Growing SME Space

Initially, Ziina made its mark as a peer-to-peer (P2P) payment app geared towards simplifying bill splits for activities like group vacations or shared rent expenses. It gained popularity with UAE’s retail users, prompting SME operators to seek similar digital payment solutions for their businesses, as highlighted by Toukan.

This led Ziina to naturally extend its solutions, split into two: Ziina Personal for informal bill splits and Ziina Business for managing business transactions. The inaugural business solution offered was the novel idea of sending payment links, supporting popular payment methods like Apple Pay, Google Pay, MasterCard, and Visa.

As the business segment’s demand surged, Ziina escalated its offerings: integrating a payment gateway for smooth online transactions via WooCommerce and Shopify, introducing point-of-sale (POS) solutions through QR codes for physical payments, and enabling payments through social media. Ziina also integrated CRM capabilities for better management of customer information and engagements.

The YC-endorsed company has maintained its P2P service; however, the pivot towards catering to small businesses is evident. It targets the 560,000 SMEs that make up more than 94% of the UAE’s companies and contribute to around 60% of the national GDP. With digital payments adoption by SMEs at 77% as of 2023, Ziina is well-positioned within the burgeoning demand for financial management tools.

“Our platform offers a comprehensive payment solution in the UAE, evolving from a purely consumer app to a vibrant ecosystem facilitating payment interactions between consumers and businesses,” Toukan explained. “Our strategy focuses on building a network effect between these two segments, offering an integrated ecosystem where all financial interactions are streamlined under one trusted partner.”

Product-Led Expansion

Ziina highlights its strategy in tackling three main challenges for SMEs in payment transactions: accessibility, cost transparency, and user experience.

On accessibility, SMEs can swiftly set up payment processing accounts, transforming weeks of setup time into mere minutes.

For pricing, Ziina prides itself on its straightforward fees—a consistent 2.6% plus 1 AED for every payment link and POS transaction, and 2.9% plus 1 AED for payment gateway transactions, without any hidden charges.

Moreover, Ziina provides a user-friendly dashboard for monitoring both online and offline transactions comprehensively. 

With a substantial growth curve, Ziina now boasts 50,000 active users spanning both retail and commercial sectors, with a diverse clientele from the fashion industry to travel and tourism. Toukan disclosed to TechCrunch that the firm is currently processing approximately 1,050 dirhams ($280) per minute, aiming to reach an annual transaction volume of 1.1 billion dirhams (~$300 million), a significant jump from the previous year’s 550 million dirhams (~$150 million).

Remarkably, Ziina’s expansion has been largely product-driven, without the need for a dedicated sales force. The CEO noted that 55% of its customers were acquired organically, with the remainder coming from B2B referrals.

With a central bank license in place, Ziina is poised to broaden its financial services, a move that includes welcoming its first sales professionals, some of whom come from Revolut.

Ziina stands out as the first venture-backed firm in the region to secure a stored value facility (SVF) license from the UAE Central Bank, providing it with a competitive edge to offer a wider array of financial solutions. This strategic positioning, coupled with future endeavors into expense management through their upcoming ZiiCard product, distinguishes Ziina in a crowded field of regional fintechs offering overlapping services.

Despite facing competition, the founders see vast opportunities for Ziina within the expanding payment sectors for consumers and businesses across the MENA region.

“The Middle East, particularly with its robust GDP growth, has the UAE playing a pioneering role. We’re confident that, with our focused efforts, Ziina could potentially serve 200,000 monthly active businesses in four years. Drawing inspiration from Nubank’s success in Brazil, we aim to achieve similar market penetration levels here in the region,” Toukan shared ambitiously.

The Series A funding round also saw contributions from Activant Capital, Avenir Growth, Fintech Collective, FJ Labs, Jabbar Internet Group, Middle East Venture Partners, and Y Combinator, pushing Ziina’s venture capital to upwards of $30 million since launching in 2020.