The Middle East is considered a global leader in digital transformation, with near 100 per cent internet penetration in many markets and record funding of tech start-ups across the region. Yet many SMEs still face challenges in opening bank accounts for their new businesses or digitising financial processes — presenting a major barrier for innovation and growth.
Enter Xpence — the Middle East, North Africa, Afghanistan, and Pakistan (MENAP) region’s first and only financial management platform with embedded business banking solutions for small and medium enterprises (SMEs). It recently announced the launch of its expense management solution and cards in the UAE via a partnership with Visa, at the Gitex Global technology conference in Dubai, which ended on Friday.
Saad Ansari, co-founder and CEO of Xpence, explained that the idea for Xpence was first born in Abu Dhabi in February 2018. Following almost a year of developing the idea for a consumer-focused neobank, with the aim of banking the millions of unbanked in the GCC region, Ansari noticed that many start-up founders were approaching them to ask if they could open bank accounts. This is when he decided to pivot from the idea of a consumer neobank, to a SME financial management platform with embedded banking solutions.
The goal remains the same: to bank the unbanked. But instead of individuals, Xpence aims to serve over 19+ million SMEs in the MENAP region who struggle to open a bank account for their new businesses. This is a challenge Ansari had personally faced when starting his own ventures.
“As a British-born Pakistani with over a decade of entrepreneurial experience when I arrived in the UAE seven years ago, I was surprised to find accessing financial services as a new business less straightforward than expected,” Ansari said.
“Since then, having founded multiple businesses in Bahrain, the UAE, and the Kingdom of Saudi Arabia (KSA), I witnessed first-hand the struggles start-ups encounter when it comes to opening a bank account — a crucial element of running, growing and scaling a successful business,” he added.
Just a few months after presenting the idea for Xpence at startAD in 2018, Xpence was invited by the Abu Dhabi Global Market (ADGM) regulator to apply for a RegLab licence for fintech services, which was then granted three months later. The regulator at the time only issued ten licenses per year to fin techs. Marking a turning point in its journey, this was followed by Xpence becoming one of the first fintechs in the region to join the Visa Fintech Fast track Programme in early 2019. Then, in March 2019, the first Xpence transaction was conducted at Dubai Duty Free, while the first transactions in Bahrain (November 2020) and the UAE (August 2022) were for the Share The Meal charity programme by the United Nations’ World Food Programme (WFP).
“I first met Saad (Ansari) five years ago at a start-up pod in Gitex. I could immediately see his infectious passion and grit to innovate for financial inclusion,“ said Nihal Shaikh, Assistant Director of Communications and Strategic Projects at startAD.
“Xpence was a top performer at the startAD Corporate Sprint Accelerator program and demonstrated great coachability and a natural instinct to spot market opportunities and evolve for the better, while staying true to their purpose. It is great to see them come full circle now as a key exhibitor at Gitex Global.
This is a testament to the tangible growth and strong track record of Xpence. They are just getting started and poised for great things.”
Today, the financial management platform's embedded banking solutions for SMEs include globally accepted physical and virtual employee expense cards, simplified digital invoicing, multi-currency wallets and the automation of payment processing. With Xpence, businesses can also set individual spending controls and limits on each card, while real‐time monitoring and automated bookkeeping eliminate the need for tedious expense reports, promote efficiency and can help businesses save money.
To date, Ansari has bootstrapped the growth of Xpence, with just $5 (Dh18.37) million in funding, yet it's already made significant strides in its expansion across multiple markets. Its launch in the UAE is the second of five strategic markets it plans to enter over the next 18 months. Xpence is working with regulators in key markets across the MENAP region, and is legally incorporated in Bahrain, Egypt, Pakistan, Saudi Arabia and the UAE — with others in the pipeline. Demand for its solutions is also significant, with over 2,000 companies currently on the waiting list.
According to Alex McCrea, Vice President and Head of Digital Partnerships and Ventures in Central and Eastern Europe, Middle East and Africa, at Visa, “We are delighted to partner with Xpence in launching this exciting payment solution that can help businesses in the GCC region control spend, maximize visibility, and optimise cash flow more conveniently and securely. We look forward to supporting Xpence’s expansion and joining them in enabling the digital transformation of more businesses across the region.”
The market opportunity for Xpence is significant, with a serviceable addressable market of over $13 (Dh47.75) billion — the annual revenue generated from 23 million MENA businesses. Currently looking to raise its next funding round, Xpence’s aim is to become the definitive business banking super app, and ultimately change how companies manage their finances for the better, so they can focus on doing what they do best — growing their business.
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