Dubai-based accounting and financial compliance startup, Wafeq, raises $3M • TechCrunch

In 2016, the member states of the Gulf Cooperation Council (GCC) signed the Value Added Tax (VAT) agreement that paves the way for the introduction of the general consumption tax throughout the region. The United Arab Emirates (UAE) and Saudi Arabia became the first member states to adopt the treaty in 2018, and its implementation meant that, for the first time, companies in these territories were required to file VAT returns regularly.

Nadim Alameddine, a resident of the United Arab Emirates, says he immediately saw an opportunity in the accounting space as companies sought to file returns as required by the new law. This inspired him to launch wafeq in 2019, a startup that initially offered accounting services and then, in 2021, launched a scalable e-invoicing and accounting SaaS solution focused on clients in the UAE and Saudi Arabia.

Wafeq is now exploring new growth opportunities in Egypt while doubling down on its existing markets as companies meet evolving accounting and financial requirements. The growth plans follow a seed funding of $3 million that it secured in a round led by Raed Ventures and participated in by Wamda Capital.

“Regulatory changes are happening in Saudi Arabia and Egypt, and that’s what we’re trying to capitalize on right now…we’re also doubling down on our existing markets, where we already have good traction,” Alameddine told TechCrunch.

Egypt and Saudi Arabia currently require companies to comply with electronic invoicing, which he says has led to an increase in demand for accounting software, which Wafeq is leveraging through its enterprise product (API).

Wafeq is a ratified provider in Saudi Arabia and the United Arab Emirates (e-invoicing is not yet mandatory there). The startup is also in the process of getting approval from the Egyptian Tax Authority. Alameddine said the North African country offers tremendous opportunities for start-ups as it is home to millions of small and medium-sized businesses.

Wafeq says it boosts accounting and financial compliance for SMEs. courtesy image: Wafeq

Its accounting platform, on the other hand, makes it easy for clients to generate their VAT returns, manage inventory, payroll, invoices, and keep track of expenses. It also generates actionable financial reports and insights for businesses.

“We position ourselves as a complete accounting software for SMBs and offer three different plans that cater to companies looking to send compliant invoices, manage their accounts payable, or those looking for a complete accounting solution that includes inventory management and payroll services” Alameddine said.

Currently, more than 630,000 invoices are created each month through its platform, with total monthly invoiced amounts exceeding $117 million. They anticipate this will grow tremendously in the wake of their growth plans.

Commenting on the deal, said Talal Alasmari, founding partner of Raed Ventures; “We are delighted to support Wafeq as they solve a problem that affects thousands of companies in the region. Digitizing accounting practices will truly transform the way SMEs operate here, increasing operational transparency, creating efficiencies and contributing to economic growth.”