CAIRO: Away from the commercial frenzy around the FIFA World Cup in neighboring Qatar, Saudi Arabia is setting the stage for a business opportunity that could change the Kingdom’s fortunes. In recent months, its banking industry has invited a host of fintech companies that could not only deliver digitalization benefits to its customers, but also bolster its economy with better spending opportunities.
One of the latest players to join the bandwagon is Indian fintech facilitator M2P, which is expanding its regional footprint by offering financial solutions in Saudi Arabia by 2023.
Founded in 2014, M2P provides fintech companies, banks and financial institutions with the right technology solutions to boost their financial services.
In an exclusive interview with Arab News, Madhusudanan R, founder of M2P, said the company is entering the Saudi market after experiencing massive growth in its fintech sector.
“We have managed to support many companies with our products, and I believe we can do the same in Saudi Arabia,” Madhusudanan said.
We are present in around twenty markets; we serve 700 fintech companies, 100 banks and 120 non-bank financial institutions. India is our biggest market with over 400 fintech.
Madhusudanan R, Founder of M2P
He added that the company will launch in the Kingdom by the end of January 2023 and announce a few of its partnerships.
Many regional companies have recognized the growth of the fintech sector in Saudi Arabia as several players have expanded their operations in the country.
UAE fintech startup Pemo also plans to launch its services in Saudi Arabia by 2023, in addition to YAP, another Emirati fintech that expanded to the Kingdom in July.
The Saudi Central Bank, also known as SAMA, has also been pushing towards digital transformation as the country plans to activate open banking in the first quarter of 2023.
Indian M2P first started its expansion in the United Arab Emirates, where it established a regional headquarters to consolidate its presence in the Middle East.
The company then started attracting clients from different parts of the region, as it currently serves businesses in the United Arab Emirates, Qatar, Bahrain, Egypt and Saudi Arabia.
Madhusudanan explained that the company has over 900 customers globally, with around 20 current customers from the Kingdom.
“We are present in around twenty markets; we serve 700 fintech companies, 100 banks and 120 non-bank financial institutions. India is our biggest market with over 400 fintechs,” he added.
The founder also explained that M2P could easily reach more than 50 customers in Saudi Arabia over the next year because it is a fintech enabler and does not require central bank or government licenses.
“Although not officially announced yet, we have already started working with several banks and companies in Saudi Arabia as we have huge plans for the market,” he added.
The company is in talks with three to four banks and about 14 fintech companies in Saudi Arabia that want to use the M2P platform.
The Kingdom has been working to establish a regional fintech hub by facilitating the process of operating fintech businesses in the country, as it plans to develop more than 500 fintech businesses by 2030.
“I hope we can contribute to Saudi Arabia’s Vision 2030 by making the Kingdom one of the most successful fintech ecosystems in the region,” Madhusudanan added.
M2P aims to provide Saudi businesses with all of its 25 financial solutions which range from pay, buy now, pay later and banking services.
To underscore the Kingdom’s shift to digital, the Saudi banking sector saw massive progress in 2021, with financial inclusion reaching 83% and around 16 million bank accounts opened digitally.
Additionally, the Kingdom has seen massive changes in its payments industry as Vision 2030 aims to increase the share of non-cash transactions to 70% by 2025.
The strategy also aims to increase the sector’s contribution to gross domestic product to $3.46 billion by 2030.
Global digital payment companies like Visa and Mastercard have also recognized the changes in consumer payment, with both companies agreeing that the Kingdom has seen one of the highest contactless payment growth curves in history.
Last month, Visa also announced the creation of its innovation center in Riyadh to enable access to payment technologies.
“Payments executed through smart devices by individuals at point-of-sale terminals increased by 282% in 2021,” the Financial Sector Development Plan says.
Madhusudanan explained that fintech startups could easily launch new payment offerings with its solutions which have already laid the groundwork to easily integrate with banks.
The company has successfully processed over $10 billion in transactions through its solutions and served over 35 million end customers.
M2P has been well positioned to meet the needs of fintech companies with the right solutions. The company has received total funding of $110 million, with its last round of $20 million announced in January 2022.
Investors include New York-based private equity firm Insight Partners, MUFG Innovation Partners, Tiger Global and Better Capital.
Madhusudanan said the company is currently valued at $620 million to invest its money in expanding its regional footprint.
The company achieved profitability two years ago, but decided to sacrifice its positive cash flow to reach more customers and grow its customer base, as it plans to return to a green balance sheet by next year.
“Now we are much more focused on growth, we have acquired many businesses as well, so we have to compromise on profitability as we have hired many team members and are moving into new markets,” Madhusudanan explained.
He added that the company currently has an office in Riyadh and will add 10 more members to the team by next year.
The company has no plans to go public yet, but Madhusudanan said, “We will think about doing that, maybe in the next three or four years.”
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