CAIRO: UAE-based fintech company baraka raised $20 million in a series A funding round to double down on Saudi expansion.
With over 6,000 US-listed securities on its commission-free platform, baraka makes investing accessible to all with no minimum investment requirements.
In an exclusive interview with Arab News, Feras Jalbout, CEO and founder of baraka, said that the company will utilize the majority of its funding for expansion and licensing in new markets.
“As (Saudi Arabia is) the largest market in the region, we are excited about the prospects of having a local presence. Of course, we need to first complete the licensing process, as mandated by the government,” Jalbout told Arab News.
He added: “The Kingdom has adopted the world’s leading standards for equity investing, and we look forward to being a long-term partner to investors here in the future.”
With Vision 2030 being a strong economic foundation, Jalbout expects the interest in equity markets to be bolstered by fintech like baraka.
“With the backing of our investors, we have a long-term commitment to the Kingdom, where the young mobile-first population seeks intuitive and digital-friendly solutions,” he added.
Jalbout further stated that the Kingdom’s gross domestic product is expected to grow by 8 percent this year with non-oil activities increasing by 5.9 percent, adding that “this is inspiring confidence and investor interest in the Gulf Cooperation Council’s largest economy.”
Being the region’s largest economy, Saudi Arabia is attracting investor interest from around the world, said Jalbout, adding that “the listing of companies like Aramco on the Saudi Stock Exchange, known as Tadawul, sends a strong message to global investors.”
“We want to be able to create access to local equity markets like Tadawul. This will not only boost investor interest, but also support the growth of the Saudi economy,” said baraka founder.
“We are excited about the potential of the local markets and look forward to connecting investors from around the region to opportunities here.”
Moreover, the CEO added that more companies are choosing to go public in Saudi Arabia which will boost economic growth as well as wealth creation.
Giving the example of Tadawul, he said the Saudi stock exchange raised $4.7 billion through 27 new listings in the first half of 2022, with a healthy pipeline of companies looking to list over the coming months. “This is indicative evidence of the potential and positive impact of equity investing on the economy,” explained Jalbout.
Established in 2021, baraka acts as a one-stop platform for investors by providing access to news and content for free to help users make informed and independent decisions.
As part of safeguards, Jalbout pointed out that baraka users benefit from having their shares and exchange-traded funds registered in their names through its affiliation with a Securities and Exchange Commission Registered broker.
“Dividends are paid directly to their brokerage accounts,” he said, adding that they get protection from the Securities Investor Protection Corp. with a limit of up to $500,000.
Jalbout stressed that the company adheres to best practices as it is regulated by the Dubai Financial Services Authority in the Middle East region.
Since its launch, baraka has seen robust growth with global investors like PayPal founder Peter Thiel’s Valar Ventures leading the round along with Knollwood, as the platform saw users signing up to its free and premium plans.
“Data shows that Middle East Exchanges have had a nearly 300 percent increase in IPOs in 2022 with retail investors leading a 16 percent increase in the Middle East’s total assets under management to $1.2 trillion, empowered by technology platforms like baraka,” Jalbout stated.
“Once licensed in other markets, we expect to have further growth while contributing to the growth of regional equity markets,” he concluded.