Hakbah, a Saudi Arabia-based savings platform, has closed a $2m pre-series A funding round.
The funding will be used to accelerate the fintech’s presence in the region, improve the user journey and enhance its savings engine algorithm, “to optimally serve customers seeking to save in an innovative, accessible manner, with a social impact”.
Global Ventures and Dubai-based Aditum Investment Management participated in the round, providing Hakbah with its first institutional capital.
In 2022, Hakbah helped 18,000 customers save more than $35m as it grew 20x.
The fintech aims to tackle the “savings crisis” in the Middle East.
In Saudi Arabia, 70% of Saudis do not have emergency savings, with the household savings rate averaging 1.6%, according to Hakbah.
Naif AbuSaida, founder of Hakbah, commented: “Savings are an important pillar of the Financial Sector Development Programme and increasing them is a key focus for Saudi Vision 2030.
“Hakbah will play a key role in supporting this goal by widening its savings offering and partnerships for employees, gig-workers, students, housewives, and many others.”
Noor Sweid, managing partner of Global Ventures, said: “While savings groups are the most popular form of alternative borrowing for unbanked groups in emerging economies, various pain points still define the user experience.
“These include inefficiencies in identifying and managing savings groups, to a lack of transparency, flexibility and consistency in payments.
“Hakbah is stepping in to digitise the $6 billion ROSCA market in Saudi Arabia and the wider region.”