Following a string of successful Islamic fintech funding deals, Islamic alternative finance company FlexxPay has raised US$3 million in a pre-series A round, supporting its growth plans including rolling out in Bahrain over the next few weeks.
International and regional investors invested in the start-up including JIMCO, Target Global, Wamda, DIFC Fintech Fund, Arzan VC, SuknaVentures, Nuwa Capital and VentureSouq. March Holding, which has been a consistent supporter of FlexxPay since backing it during its seed round, also contributed to this pre-series A round, which comprised a mix of equity and debt. The latest deal brings total investments received by FlexxPay to US$4.5 million.
The firm, founded in 2018, is already operating in the UAE and Saudi Arabia. It is looking to commence business in Bahrain in March, with plans to expand to the rest of MENA “in the near future”. Proceeds from the investment round will be used to boost its technology platform and also grow its corporate client base in the region.
“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&L (profit and loss) 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,” Michael Truschler, co-founder and CEO of FlexxPay, said.
The FlexxPay platform enables access to already-earned income such as salaries, commissions, pensions and end of service benefits via its platform. This business model is not novel and is gaining traction in developed markets including the US, Australia and Europe, with start-ups such as Earnin, PayActiv and Dailypay in the US, and Wagestream and Hastee in the UK.
The idea is that companies would 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. According to FlexxPay, human resource departments’ workload is reduced by around 20% by eliminating time spent processing salary advance requests.
FlexxPay’s platform also allows users to set up a savings plan. To date, the start-up serves companies from various sectors including insurance, telecoms, retail, logistics, financial services and real estate. The year started on a strong investment note for the Islamic fintech sector; other start-ups which have successfully closed funding rounds this year include Malaysia’s CapBay and Saudi Arabia’s FOODICS.