Egyptian buy now pay later (BNPL) firm valU said Tuesday that it has acquired Paynas, a full-fledged employee management and benefits company that offers financial services to micro, small, and medium enterprises (MSMEs).
valU, the fintech arm of investment bank EFG Hermes, said in a statement that the deal builds on its mission to offer the wider society access to seamless financial solutions that ease up their daily activities while enhancing their lifestyle.
The acquisition is also expected to act as a gateway for valU to reach small businesses that are considered the backbone of Egypt’s economy. vaIU said that combining its BNPL plans covering healthcare, education, home appliances and furniture with Paynas’ service offering will help it deliver on its vision of becoming a holistic financing powerhouse.
“This pivotal transaction reflects the compelling investment opportunities and growth prospects presented by the start-up and fintech sectors in Egypt,” Rania A. Al-Mashat, Egypt’s Minister of International Cooperation said in a statement.
Founded in 2019, Paynas enables MSMEs to digitise core HR processes as well as run and disburse payroll accurately and seamlessly, while providing employees a suite of benefits aimed at enhancing their financial wellness and accessibility.
Growth prospects
Last week, valU issued $28 million (EGP 532.6 million) of securitized bonds, the company’s second bond issuance in less than a year. The BNPL firm said the two 12-month tranches are backed by a $32 million (EGP 609.1 million) receivables portfolio and hold a Prime-1 rating from Middle East Rating Services (MERIS).
BNPL has re-shaped the fintech, payments and e-commerce space in the Middle East over the past two and half years, and some of the biggest players in the industry include Saudi Arabia’s Tamara and UAE’s Spotii, Tabby and Postpay.
valU signed an agreement with Amazon in May by which the e-commerce giant will enable BNPL’s provision of consumer financing as a payment method on amazon.eg. Under the agreement, Amazon will acquire $10 million of EFG Hermes global depository receipts (GDRs), with the possibility to replace that investment into valU in the future, equivalent to 4.26% of the issued share capital of valU, based on a current post-money valuation of valU of $235 million.
