Entrepreneurship

Dubai-based Wafek Raises $3M • TechCrunch

In 2016, member states of the Gulf Cooperation Council (GCC) signed a value added tax (VAT) agreement paving the way for the introduction of a general consumption tax across the region. The United Arab Emirates (UAE) and Saudi Arabia became the first member states to adopt the agreement in 2018, and its implementation meant that for the first time businesses in these territories were required to submit VAT returns periodically.

Nadim Alamedin, a resident of the UAE, says he immediately saw an opportunity in the accounting space as businesses scrambled to file reports in accordance with the new law. This inspired him to launch Wafek in 2019, a startup that initially offered accounting services and later, in 2021, launched a scalable SaaS accounting and e-invoicing solution focused on clients in the UAE and Saudi Arabia.

Wafek is now exploring new growth opportunities in Egypt, while doubling down on its existing markets as businesses comply with growing accounting and financial requirements. The growth plans follow a $3 million seed funding it secured in a round led by Raed Ventures and participated by Vamda Capital.

“There are regulatory changes happening in Saudi Arabia and Egypt and that’s what we’re trying to take advantage of right now … we’re also doubling down on our existing markets, where we already have good traction,” Alamedin told TechCrunch.

Egypt and Saudi Arabia currently require businesses to be e-invoicing compliant, which he says has led to a surge in demand for the accounting software, which Wafek uses through its enterprise product (API).

Wafek is a ratified provider in Saudi Arabia and the UAE (e-invoicing is not yet mandatory there). The startup is in the process of seeking approval from the Egyptian tax administration as well. Alameddine said the North African country offers huge opportunities for startups as it is home to millions of small and medium enterprises.

Dubai-based Wafek, which provides accounting and financial compliance for small and medium-sized businesses, raises $3 million in seed funding

Wafek says it has accounting and financial compliance strengths for SMEs. Courtesy image: Wafek

Its accounting platform, on the other hand, makes it easy for clients to generate their VAT returns, manage inventory, payroll, invoices and track expenses. It also generates effective financial reports and insights for businesses.

“We position ourselves as a complete accounting software for small and medium-sized businesses and offer three different plans that serve businesses that want to send reconciled invoices, manage their accounts payable, or those looking for a complete accounting solution that includes inventory management and payroll services,” Alameddine said. .

Currently, over 630,000 invoices are created each month through its platform, with total monthly invoiced amounts exceeding $117 million. They predict that this will grow enormously in light of its growth plans.

Commenting on the deal, Talal Alasmari, founding partner of Raed Ventures said; “We are delighted to support Wafek as they tackle a problem affecting thousands of businesses in the region.” Digitizing accounting practices will truly transform the way SMEs work here, increasing operational transparency, creating efficiency and contributing to economic growth.”

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