Nexta, an Egyptian startup that plans to launch its banking app in the coming months, has received a $5 million investment from eFinance Group, a state-owned provider of digital payment solutions. The news follows Nexta’s $2 million pre-seed round this March, led by Egyptian early-stage VC DisruptTech.
Last year, Nexta received a temporary license from the Central Bank of Egypt (CBE) and announced that it would seek final approval from the Commercial Bank of Ethiopia to meet additional requirements and fulfill certain obligations before obtaining an agent banking license to start its services in the country. The Nexta app will have a partner bank that will handle settlements and act as an intermediary between itself and CBE – but will also power the cards and technologies.
Founded in 2021 by Ahmed Hisham, Nexta wants to disrupt Egypt’s fintech scene with its “next generation banking” app and card. According to the company, Nexta Card integrates users’ payment cards for effortless money transfers and adds expense tracking and other features.
“We are trying to build a next-generation bank and provide a seamless user experience to the user. We want to do easy and fast onboarding, card pooling, linking all your cards and multiple monetization features,” the co-founder and CEO told TechCrunch in an interview, adding that the company will generate revenue from transaction fees. “That’s the first thing we’re going to get into with the soft launch and budgeting and spending tracking. And we’ll be adding more features every month or quarter to address the Egyptians’ point,” he said.
Egypt is one of the highest consumer spending markets in Africa. It’s also one of the region’s most cash-dependent markets, which means there’s a huge opportunity for fintechs to bring consumers online by launching card services. Egyptians looking for new options that don’t include telco-powered mobile wallets and digital channels from legacy banks can turn to Nexta and Telda, the Sequoia-backed fintech that last week announced a $20 million seed round.
Unlike Telda, which allows sign-ups if the app hasn’t even launched yet (it didn’t go well after more than 30,000 users waited a year to use the app), Nexta limited its waitlist to its website subscribers. Get them involved in content marketing in preparation for the launch. Hisham declined to say how many applicants are on the company’s waiting list.
Like Sabah, in an interview with TechCrunch last week, Hisham agrees that both consumer-facing fintech apps will eventually compete with cash. “I believe the competition is very healthy and I thank Telada for the awareness and the first step to consumers. The Egyptian market needs four or five players like us, not just Telda and Nextan,” the CEO added.
E-Finance Chairman and CEO Ibrahim Sarhan said in a statement that the investment in Nectata is in line with Egypt’s digital transformation plan and Vision 2030. “Nexta is one of the most promising companies funded by the group in a number of targeted investments,” said Sahar. “It is worth noting that the group Enclud – an investment fund – is involved in improving the current and future direction of fintech in Egypt by investing in emerging fintech companies.”
Describing this investment as a strategic partnership rather than a financial support, Hisham said he is happy to have Nexta e-finance on board as the demand for financial services in Egypt is increasing. “In such a promising market, we believe there is a huge opportunity for us to offer a different and superior experience to different users,” he said.
Proceeds from the investment will help Nexta prepare for launch, hire talent and invest in technology.
