- FlexxPay, a Dubai-based fintech, raises an impressive sum of USD 3 million in equity and debt to empower employees by giving them access to their earned salaries before the date of remuneration.
Headquartered in Dubai, FlexxPay, a fintech that operates by the mission to fix the pay frequency problem at its root, recently raised USD 3 million in a pre-Series A round that consists of equity debt.
The funding round witnessed participants including European VC Target Global, Wamda, JIMCO (Jameel Investment Management Company), Saudi’s Sukna Ventures, DIFC Fintech Fund, Arzan VC, March Holding, Nuwa Capital, and VentureSouq.
A part of the current round was introduced in December 2019. By now, the fintech company has closed the Pre-Series A, which takes their cumulative funding to date to USD 4.5 million. The company’s seed round that gained USD 1.5 million was closed back in July 2019.
FlexxPay plans to invest the latest funds to enhance its platform further and improve its client base.
The fintech commenced business in 2018 by offering services to employers in the UAE (United Arab Emirates). Later, the business was expanded to Saudi, and now the company has plans to launch its platform in Bahrain.
On the professional front, the fintech partners with businesses to allow their employees to access a part of their already earned salaries, pensions, commissions, and end of service benefits via its online platform.
As noted in a statement by FlexxPay, “Companies benefit largely from increased employee motivation and productivity while they see a significant decrease of reported sick leaves due to reduced financial stress on employees. HR departments’ workload is reduced by around 20% by eliminating time spent processing salary advance requests.”
Being Sharia-compliant, the company does not charge any interest. The fintech earns revenue by charging a minimum transaction fee to use the service. The corporates don’t pay anything for using it, and the advances are paid by FlexxPay, so there is no impact on employers’ cash flow.
The statement published by the fintech did not reveal any numbers but mentioned that businesses deploy their services from a variety of industries ranging from telecom, logistics, retails, real estate, and financial services.
Similar platforms running in the US and Europe have raised hundreds of millions of dollars in Venture Capital, so we can claim this to be a validated model.
Companies such as Khazna, NowPay, and Finja offer similar services to businesses and their employees in Pakistan and Egypt.
The experts’ take
Michael Truschler, Co-Founder and CEO of FlexxPay, said, “The continued support of our existing investors and the addition of new investors is invaluable to FlexxPay’s growth and evolution. We are solving a real-world problem for employers and their employees. Financial stress directly impacts the bottom line of a company’s P and amp;L and is one of the main factors for employees being less productive and reporting sick. Giving people access to what they have already earned is just the right thing to do. They’ve earned it, they deserve it.”
Khaled Talhouni, Managing Partner at Nuwa Capital, said, “We invested in FlexxPay to back an exceptional team with a strong background of building a business in the past and has developed a very scalable solution that benefits both, the companies and the employees.”