MoneyFellows, a fintech startup that’s best known for digitizing the ROSCA model has reached a major milestone. In the process they raised $13 million in a pre-Series C funding round. This financial boost, led by Al Mada Ventures and DPI’s Nclude Fund, will enable the company to expand its operations beyond Egypt, with plans to launch in Morocco by the end of the year. And with this new round of capital, MoneyFellows plans to not only deepen its offerings but expand its audience.
Ahmed Wadi started MoneyFellows in 2016. Now through its technology, the company has digitized the centuries-old ROSCA model to make group savings more convenient and accessible. The company allows participants to contribute regularly to a shared pool, which can then be accessed by members in need of funds. Wadi used this model in Germany and the U.K. to test the model before bringing it to market in Egypt. He told us that unpacking the digital ROSCA model was more time-consuming than he anticipated.
It was worth the time. Most attempts to scale ROSCAs digitally, even by banks and telcos globally, have failed because they underestimated how complex the underlying behavior is, Wadi explained.
MoneyFellows has worked with 350+ local and regional partners and MoneyFellows to expand its reach. Combined, they’ve brought in over $50 million in investments since the company started. The platform has experienced tremendous growth since launch, now claiming more than 8.5 million users. During that time, the average payout per user almost doubled. It surged from 23,000 EGP ($453) to 45,000 EGP ($906).
It has done all this while keeping their debt and balance sheet exposure near zero. In her presentation, Wadi highlighted just how destabilizing this model is. He continued, “It’s very disruptive in its own right to lend out billions without any working capital.”
Beyond its core group savings model, MoneyFellows has plans to roll out investment, payroll, insurance, and remittance products. The company recently released a new card product. Today this enables users to receive payouts, repay installments, and spend with millions of merchant partners!
Wadi was encouraged by the company’s focus on making their ROSCA model work. He continued, “So if we create cohorts of 10 and find out that there are only nine people in each cohort, we’re going to step in and fund the 10th.” This kind of proactive engagement keeps the working group together and builds trust with participants.
As MoneyFellows looks ahead to its Moroccan launch, the platform has already established key partnerships and regulatory approvals needed for scaling up. The company’s unique approach to the market has earned them national recognition as innovators in the booming fintech space. Omar Laalej, a notable figure in finance, remarked on the historical significance of ROSCAs: “ROSCA’s are very old financial arrangements, with roots going back hundreds, if not thousands of years.”
Having raised more than $60 million in total funding so far, MoneyFellows is poised for rapid growth. The small private company is now poised to take pipewrenching success in other markets. The firm’s knack for translating time-honored financial practices into a current digital experience has them poised for great things ahead.
