Khazna: A Fintech Startup Revolutionizing Access to Financial Services in Egypt

A Growing Need for Financial Inclusion

A significant portion of Egypt’s population lacks access to traditional banking, forcing many to rely on cash transactions and informal lending. Khazna, a fintech startup founded in 2019, is addressing this issue by providing financial services tailored for low- and middle-income workers.

Securing Funding and Expansion Plans

Khazna recently secured $16 million in pre-Series B funding, bringing its total funding to over $63 million. The investment will support its expansion plans as it prepares to apply for a digital banking license in Egypt and expand into Saudi Arabia.

Growing User Base and Services

When we covered Khazna in 2022, it had just raised $38 million pre-Series A with over 150,000 customers across its products. Today, Khazna has grown its user base to over 500,000 people, with about 100,000 users receiving their payroll through Khazna, allowing the company to integrate financial services such as loans and insurance directly into their payroll accounts.

Focusing on Workers Earning Three Times Less Than Egypt’s Minimum Wage

Khazna provides affordable financial tools to workers earning three times less than Egypt’s minimum wage. The company offers lending services, helping gig workers and pensioners access credit. CEO Omar Saleh explained that the company initially focused on payroll-backed credit and pension lending, contributing to its break-even last month.

On the Path to Becoming a Digital Bank

Khazna provides other services like bill payments, buy now, pay later, medical insurance, and a rent-to-own product. However, the company is strategically moving toward becoming a full-fledged digital bank for Egypt’s underserved communities. To achieve this, Khazna is working to obtain a deposit-taking license in Egypt, which would allow the startup to accept customer deposits and lower its cost of funds.

Expansion Plans and IPO

Khazna is targeting mid-2026 to secure the banking license from Egypt’s Central Bank. The company is also setting sights on Saudi Arabia, where there is a growing demand for consumer finance solutions. Unlike BNPL players, Khazna hopes to differentiate itself with medium-term credit products like earned wage access (EWA), payroll-backed lending, and pension-based credit.

Prioritizing Saudi Arabia and Expansion Plans

Khazna is prioritizing Saudi Arabia due to its strong connection with Egypt, with nearly three million Egyptians living in Saudi. The Egypt-Saudi remittance corridor is one of the world’s largest, presenting an opportunity to offer cross-border financial services. Additionally, Saudi Arabia’s capital markets are a driver in Khazna’s decision, with Tadawul being one of the region’s most liquid and retail-investor-driven stock exchanges.

Expansion Plans and IPO

Khazna plans to have 40-50% of its business coming from Saudi in the next four years, making it eligible for a public listing on Tadawul. For early-stage investors who have backed the company for four to five years, Saleh says this provides a clear path to a high-value exit.

Recent Funding and Macroconomic Challenges

Khazna welcomed participation from new and existing investors, including global investors like Quona and Speedinvest, as well as regional financial institutions and investment firms. The recent funding round was structured due to the macroeconomic challenges in Egypt over the past two years, which had a hand in making fundraising more difficult for startups and ventures. However, 2024 brought a major shift, with over $50 billion in foreign direct investment (FDI) flowing into Egypt following economic reforms and a more flexible exchange rate.