Abu Dhabi-based fintech startup FlapKap secures $34m pre-series A to scale SME financing across MENA

FlapKap, an Abu Dhabi-based fintech startup that provides revenue-based and embedded financing solutions in the MENA region, announced the completion of $34 million in new debt and equity funding.

The funding round was led by BECO Capital and welcomed significant new investment from Pact VC. The round also included follow-on investment from A15, Nclude and QED Investors and debt financing from Channel Capital. This capital injection brings FlapKap’s total funding to $37.6 million.

With this pre-Series A funding, FlapKap will expand its capabilities in the UAE and GCC region, deploying more capital to empower SMEs in the space and helping them maximise their growth potential. The company will also enhance its technology infrastructure to launch trade finance products exclusively designed for B2B businesses.

FlapKap was launched to help e-Commerce businesses and other consumer-facing industries like retail and restaurants scale their inventory and digital ads through instant funding, with the flexibility to pay later. The company focused on supporting these businesses that had limited access to traditional bank loans or venture capital by streamlining the process of underwriting and has since expanded its services to support a broader range of SMEs.

Flapkap could easily evaluate and approve prospective companies by connecting their platform to the businesses’ e-commerce sites and social media accounts, providing the merchants with an offer less than 48 hours after they sign up. The startup has now broadened its financing reach to serve a diverse range of online and offline businesses. By leveraging unconventional data sources, the emergence of open banking, an AI powered credit model, and the growing digital footprints of SMEs, FlapKap has developed a data-driven approach that automates the lending process and reduces operational costs. The platform integrates with third-party verified data to provide precise underwriting of businesses. FlapKap assesses businesses across multiple platforms, including e-commerce, advertising, online reviews, payment gateways, PoS systems, bank accounts, and Enterprise Resource Planning (ERP) platforms.

Ahmad Coucha, CEO and Co-founder, FlapKap: ''The growth in data has made it easier than ever to support SMEs, and at FlapKap, we're rising to the occasion. By leveraging data and technology, we're breaking down the barriers that SMEs face in accessing financial services. We're now able to assess risk more accurately and reduce underwriting costs, addressing the two biggest obstacles faced by incumbent financial institutions. This investment will support our continued growth in the UAE and Egypt and further our expansion into the rest of the GCC and help us gain valuable insights from our high-calibre investment partners.''

With the new funding, FlapKap will continue its mission to address MENA's $180 billion SME financing gap, as estimated by the International Finance Corporation. With an estimated 19-23 million MSMEs in the MENA region, including both formal and informal, these enterprises make up 80-90% of all businesses across most MENA countries. Traditional financial institutions have often overlooked this MSME segment due to inadequate infrastructure, limited data, and perceived risks. This oversight has left millions of viable businesses without the required support to scale their operations and boost their revenues. FlapKap's entry into this underserved and untapped market has already resulted in the doubling of its quarterly originations and disbursements over the past two years, while building a strong network of merchants across Egypt and the UAE.

www.flapkap.com

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