FinTechGulf Countries

UAE fintech Kema secured a $2 million pre-seed funding round

Kema, a fintech startup in the UAE founded by Michael Ghandour, previously co-founder of Mumzworld.com, has successfully raised a $2 million pre-seed investment. The funding round was led by Speedinvest and included contributions from the Dubai Foundation District Fund (DFDF). Kema aims to revolutionize the B2B sales process by digitizing, automating, and optimizing the invoice-to-cash cycle, also known as accounts receivable. This innovation enables businesses to enhance and automate their cash flows, saving both time and money.

The startup plans to deploy the new funds to launch its SaaS platform, which will focus on supporting small and medium-sized enterprises (SMEs), expanding its services throughout the UAE, and recruiting highly skilled professionals to facilitate its expansion.

A report from the UAE Central Bank in 2021 highlighted that the volume of business payments in the UAE exceeded $1.5 trillion, nearly 50% higher than all retail payments in the country. Despite this, B2B SMEs have traditionally faced more analog, inefficient, and challenging financial operations compared to larger companies.

Michael Ghandour, Kema’s founder and CEO, pointed out that many B2B SMEs struggle with achieving a stable and predictable cash flow due to ongoing payment delays, manual invoicing and follow-up processes, multiple unconnected systems, and limited access to financing for SMEs. This often results in a vicious cycle of restricted growth, rising costs, and inefficient use of the most critical resource: employee time.

The significance of this issue is underscored by a 2023 PWC report, which found that an astonishing $44 billion of working capital was tied up across just 424 regional companies. Co-founder and CTO Akash Rao added that with over 500,000 B2B SMEs in the MENA region, there could be as much as $400 billion in working capital locked in their balance sheets.

Kema aims to address the underserved needs of the B2B SME sector by accelerating their cash flows using cutting-edge technology, all while eliminating the typical integration challenges their clients face. Since launching a private beta version in the second quarter of 2023, Kema has processed over AED 16.5 million ($4.5 million) in invoices, with the platform significantly reducing the receivables process by up to 50%. The company continues to expand its features to cater to a broad range of businesses.

Kema offers a user-friendly experience with “no-code” plug-ins compatible with major accounting software like Xero and Quickbooks, enabling businesses to quickly benefit from its services. This includes generating and processing invoices, embedding payment links, sending reminders, accepting payments through various digital channels, and accessing real-time cash flow analytics.

The push towards digitization, accelerated by the COVID-19 pandemic, has led 90% of MENA SMEs to view it as a growth catalyst. Government initiatives, such as the Dubai International Growth Initiative and the Financial Sector Development Program in KSA, have been established to support SMEs.

Speedinvest partner Stefan Klestil expressed excitement about Kema’s potential to improve the financial operations of B2B SMEs in the region significantly. Sharif El-Badawi, CEO of the Dubai Future District Fund, emphasized the alignment of Kema’s mission with the Dubai Economic Agenda (D33) and its focus on using technology to digitize essential financial functions, highlighting its applicability in the UAE and other emerging markets.

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