Kema, a UAE Fintech platform founded by ex-Mumzworld.com co-founder, Michael Ghandour, has raised a $2 million pre-seed round led by Speedinvest with participation from Dubai Foundation District Fund (DFDF).
Kema transforms how businesses sell to one another (B2B) by digitizing, automating, and streamlining the invoice-to-cash process, also known as accounts receivable. Businesses benefit from accelerated and automated cash flow while saving both time and money.
The company plans to use this investment to launch its SaaS platform aimed at supporting the SME segment, scale the solution across the UAE, and hire top talent to support its growth.
According to a 2021 UAE Central Bank report, the business payments volume in the UAE crossed $1.5 trillion – that’s nearly 50% more than all retail payments in the UAE. However, the financial operations of B2B SMEs have always been more analog, inefficient, and challenging than their more mature peers.
“Having worked with B2B SMEs, a healthy and predictable cash flow cycle remains elusive for many. The problem is compounded by the combination of persistent payment delays, manual invoice workflows and follow-ups, multiple disconnected systems, and limited access to SME financing,” says Ghandour. “As a result, many businesses get stuck in a cycle of limited growth, increasing costs and unproductive use of their most valuable resource, their employees’ time.”
The impact also adds up very quickly. A 2023 PWC report concluded that a whopping $44 billion of working capital was trapped across just 424 regional companies. “We actually estimate that more than 500,000 B2B SMEs exist across MENA, suggesting that there is a staggering $400 billion in trapped working capital across their balance sheets,” said co-founder & CTO Akash Rao.
Revolutionizing B2B financial workflows
Historically, the B2B SME segment has always been underserved in terms of both capital and solutions. Kema wants to change that. “Our north star is simple, to accelerate cash flow for B2B SMEs using the latest technologies and without the integration headache that comes with it for our clients,” said Michael Ghandour.
Since the private beta version rolled out in Q2 of 2023, Kema has facilitated more than AED 16.5m (USD $4.5m) in invoices. “Incorporating learnings from working with our early customers, Kema can now slash the receivables process by up to 50%.” said Akash Rao. “We are also continuously adding a range of new features to suit many different types and sizes of businesses.”
Getting started with Kema is easy. Kema offers hassle-free “no-code” plug-ins that sync with leading accounting software, such as Xero and Quickbooks. Within minutes, businesses can unlock the benefits of using Kema by generating and processing invoices, automatically embedding payment links and sending reminders, receiving payments via a variety of digital channels, and getting real-time analytics on their cash flow.
A timely solution
Catalyzed by the COVID-19 pandemic, 90% of SMEs in MENA now believe digitization is a driver for growth. Furthermore, various government programs launched specifically to not only bolster SMEs but also allow them to thrive, such as the Dubai International Growth Initiative and Financial Sector Development Program in KSA.
“Having been part of both the UAE and European ecosystem for a long time, we understand the impact that SME digitization can have on a market. We are incredibly excited about Kema’s potential to vastly improve the financial workflows of B2B SMEs and empower them to unlock growth and opportunity in the region,“ said Speedinvest partner Stefan Klestil.
“We are looking forward to leveraging our deep experience in the fintech space to support Kema’s mission.”
“In line with the Dubai Economic Agenda (D33), one key aspect of our thesis on the Future of Finance is the use of technology to digitize core financial functions. Kema deeply understands SME financing pain points and is bringing a comprehensive solution to the market that is well-suited to the UAE and equally applicable for other emerging markets that we’ve looked at,” said Sharif El-Badawi, CEO Dubai Future District Fund.
