Riyadh-based FinTech platform Tweeq, which allows users to make payments through its app, said it raised a new round of funding to expand its operations in Saudi Arabia and the wider Mena region.
The latest funding round, which will also help the start-up to develop its product, was co-led by Saudi-based venture capital firm STV and Raed Ventures, the company said in a statement on Monday.
Tweeq did not disclose the amount raised but said it is a seven-figure investment.
”Tweeq is aiming to provide .... a better modern alternative to the traditional banking account,” Saeed Albuhairi, co-founder and chief executive of Tweeq, said.
“We are working hard to obtain the necessary licences and approvals to conduct our business under the Saudi Central Bank's supervision to achieve the kingdom's ambition of developing a diversified and effective financial sector.”
Demand for digital payments and other financial technology services has surged worldwide as more people use online banking services and other FinTech platforms to transfer money as well as pay for purchases amid the coronavirus pandemic.
Founded in 2020 by a team of seasoned banking and tech professionals, Tweeq's mobile app allows its users to open a spending account and start receiving and making payments, set monthly budgets and long-term financial goals. Users can also monitor and manage personal spending automatically across different categories.
“As financial regulators open the doors to challengers and innovators, the region is destined to witness the same shift that swept the financial sectors in the US, Europe, China and India,” Ahmad AlNaimi, a partner at STV, said. “We believe that Mena will witness an even bigger shift, fuelled by a younger population and increasingly progressive regulators.”
Customers in Saudi Arabia are increasingly choosing FinTech solutions over those offered by traditional financial institutions due to unsatisfactory digital services, the company said, citing a study by the Boston Consulting Group.
Eighty-nine per cent of Saudi Arabian citizens are willing to open an account with a FinTech start-up that does not have any brick-and-mortar branches, the report added. Meanwhile, a McKinsey report shows that over 80 per cent of urban consumers in the kingdom prefer to deal with financial institutions digitally.
Investors are also piling into the FinTech space in the region as adoption of contactless payments and other digital solutions accelerates.
Earlier this month, Dubai-based peer-to-peer payment application start-up Ziina raised $7.5 million through an early-stage funding round.
The company said it will use the funds to launch its wallet service and expand into Saudi Arabia.
