In June 2021, Ziina, fresh from completing YC’s first cohort that year and securing a $7.5 million seed, launched its fintech app to 20,000 retail customers, allowing them to send and receive money. 

Three years later, the Dubai-based startup, which now counts 50,000 retail and business customers after expanding its offerings to meet the needs of micro, small, and medium-sized businesses in the UAE, has netted $22 million in Series A funding led by Altos Ventures.

Indeed, such sizable follow-on funding despite the global funding slowdown underscores investors’ confidence in the fintech company’s growth — the company claims 34% month-over-month growth in customers for the last year, and says its revenues have increased ten-fold over the same period.

Co-founder and CEO Faisal Toukan told TechCrunch that three factors made Ziina particularly exciting to investors. They include the rapidly expanding SME segment in the UAE, its focus on product-led growth, and its recently acquired central bank license.

Expanding SME segment

Ziina originated as a peer-to-peer (P2P) payment app for splitting bills, such as for group trips or rent. While the app gained traction with retail customers in the UAE, some who ran businesses sought to use the digital wallet to send and receive payments, too, according to Toukan.

In response, Ziina organically expanded its platform into two segments: Ziina Personal for splitting bills among friends and Ziina Business for collecting payments. The first business feature allowed users to send payment links and get paid through Apple Pay, Google Pay, MasterCard and Visa. 

As demand from businesses increased, Ziina developed more products for them: a payment gateway (checkout) integrated with platforms like WooCommerce and Shopify for online payments, point-of-sale (POS) solutions for in-person payments using QR codes, and payments via social media. In addition to these features, Ziina added CRM functions so businesses can track customer details and interactions.

The YC-backed startup continues to offer its P2P service, but it’s clear why most of its product focus is now on small businesses. The startup targets an underserved market of 560,000 SMEs in the UAE, which account for over 94% of all companies and contribute about 60% of the country’s GDP. As of 2023, around 77% of SMEs in the UAE had adopted digital payments, fueling the growing demand for financial management tools.

“We’re an all-in-one platform for businesses to get paid in the UAE, having evolved from being purely a consumer app to an ecosystem that connects consumers and businesses for payments under one platform,” Toukan explained on the call. “We look at the general experience as consumers can pay businesses, businesses can pay consumers, and then build that network effect across the two customer segments. And that is one of the key differentiators we have in our product strategy and business. So basically, everything should be under one ecosystem where people have a financially trusted partner.”

Product-led growth

From a product standpoint, Ziina says it addresses three critical pain points for SMEs in the payments space: accessibility, cost transparency, and user experience.

Regarding accessibility, SMEs can use the fintech to open accounts and set up a payment processor in minutes instead of weeks.

In terms of cost, Ziina says it offers straightforward pricing with no hidden fees — 2.6% plus 1 AED (about US$ 0.25) for each payment link and POS transaction, and 2.9% plus 1 AED for each payment gateway transaction.

Lastly, customers have a dashboard to track and reconcile online and offline payments and payment links. 

With Ziina’s rapid growth over the last year, it now serves 50,000 active users, including both retail and business customers; its business customers cut across fashion and gaming to travel and tourism. Toukhan also tells TechCrunch that the startup now processes about 1,050 dirhams ($280) every 60 seconds and is on track to handle 1.1 billion dirhams (~$300 million) in annualized transaction volume, up from 550 million dirhams (~$150 million) last year.

Ziina’s growth has come primarily through product-led efforts without a dedicated sales team. According to the chief executive, 55% of its customers have come organically, while the rest have come from B2B referrals.

However, as it continues to scale and provide more financial services off the back of the banking license it received, that’ll likely change. The company is onboarding its first sales hires, including some from Revolut.

Ziina claims to be the first venture-backed startup with the stored value facility (SVF) license from the Central Bank of the UAE. This allows the fintech to offer more financial solutions – excluding lending, which requires a separate license – and earn revenue from the float when customers keep assets on the platform, for example. 

Toukan believes that this license and financial ecosystem of products (the fintech is venturing into expense management soon with the launch of its card product, ZiiCard) gives Ziina an edge over other regional fintechs that provide overlapping financial services. Paymob, for instance, provides POS terminals; Tabby is growing its financial offerings outside of buy now, pay later; Telda offers P2P payments; and Mamo is in the spend management business.

Despite this competition, the chief executive, who founded the fintech with Sarah Toukan and Andrew Gold, sees ample market potential for Ziina in the rapidly growing payments sector for consumers and businesses across the MENA region.

“The Middle East seems to be growing quite strongly, especially regarding GDP growth. And the UAE is one of the pioneers in that,” the CEO remarked. “If we at Ziina do our jobs correctly, which we’re quite excited about, we should be able to have 200,000 monthly active businesses on the platform four years from now, given the rise of SMEs in the UAE. And if you look at players like Nubank in Brazil, they hit those targets of between 10 to 20% market penetration. So we intend to do that and be the Nubank of the region.”

The Series A round also included participation from Activant Capital, Avenir Growth, Fintech Collective, FJ Labs, Jabba Internet Group, Middle East Venture Partners, and Y Combinator. This brings Ziina’s total venture raised to over $30 million since its inception in 2020.