Fuse Secures $6.6M Funding to Revolutionize Payment Solutions for Companies Expanding into MENA
Expanding into the Middle East and North Africa (MENA) region can be a daunting task for global businesses due to the intricate regulatory landscape and fragmented banking systems. However, Dubai-based fintech company Fuse is on a mission to simplify cross-border payments with its innovative API, recently securing $6.6 million in seed funding to accelerate its growth.
Understanding Fuse’s Innovative Solution
Founded in 2023 by George Davis, a former co-founder of BVNK, along with CTO James Smith, Fuse is pioneering the first infrastructure-grade payments platform that offers virtual International Bank Account Numbers (IBANs) tailored for the MENA region. This product, which is commonly found in Europe, is notably absent in many parts of MENA.
What Sets Fuse Apart?
According to Davis, “We’re currently the only provider of virtual IBANs in the Middle East.” He points out that while IBANs are a standard offering in Europe, they are virtually non-existent in MENA, creating a unique opportunity for Fuse.
Fuse’s core product suite includes:
- USD virtual accounts for cross-border transactions
- Dirham-denominated IBANs for local payments in the UAE
This innovative approach allows international businesses to manage their finances without the need for establishing a local entity or dealing with complex foreign exchange regulations.
Legacy Challenges in MENA’s Payment Landscape
Davis highlights two primary challenges that global companies face when moving money in MENA:
- Local payment firms that often lack the necessary scale.
- Larger cross-border players like Thunes, which frequently operate without local licenses and depend on unreliable partnerships.
Fuse effectively bridges this gap with its fully licensed, infrastructure-grade platform, streamlining financial transactions across the Middle East using virtual IBANs and local payout options.
Serving a Diverse Clientele
Fuse’s client base primarily consists of businesses from the U.S., Europe, and Asia eager to expand into MENA without the burdens of local banking setups or regulatory compliance issues.
Use Case: Employers of Record (EORs)
One significant application of Fuse’s technology is in the realm of Employers of Record (EORs). For instance, a U.S.-based employer with staff in the UAE typically needs a local bank account to pay salaries in dirhams, which can be challenging to obtain. Fuse provides USD-denominated virtual IBANs, enabling these businesses to pay salaries directly in AED without requiring local residency or licensing.
As Davis notes, “Customers can create unlimited IBANs in their end customers’ names and make local payments.” This feature allows businesses to operate globally while managing local payments efficiently.
Expanding Beyond the UAE
While the UAE is currently Fuse’s primary market, the platform is extending its services to include direct payouts in Saudi Arabia, Egypt, and Jordan. Additionally, Fuse supports wholesale foreign exchange for Indian and Chinese enterprises operating in the UAE, facilitating fund repatriation through some of the region’s busiest trade corridors.
Comparative Landscape
Davis compares Fuse to other startups like Currencycloud, which also offers virtual accounts and cross-border payments. However, he emphasizes that “while Currencycloud is global, Fuse is built specifically for the Middle East.” This regional focus positions Fuse to capitalize on the growing demand for digital payment solutions spurred by the e-commerce boom in MENA.
Growth Trajectory and Future Plans
Fuse has already made significant progress, processing hundreds of millions of dollars each quarter and experiencing over 50% month-over-month revenue growth. “We made more this quarter than all of last year,” Davis shares. The company generates revenue through transaction fees, a model that is proving successful in this burgeoning market.
Davis’s background includes pivotal roles at TrueLayer and BVNK, where he gained insights into the challenges of cross-border payments in MENA, ultimately leading to the creation of Fuse.
Funding and Support
The recent $6.6 million funding round was led by Northzone, a European multi-stage VC known for backing companies like Klarna and Spotify. Other investors include Flourish Ventures and Alter Global, along with notable angel investors like Flutterwave CEO Olugbenga “GB” Agboola and former Morgan Stanley MENA president George Makhoul.
Sanjot Malhi, a partner at Northzone, remarked, “The Fuse team is transforming payment infrastructure in one of the world’s fastest-growing markets.” With new capital in hand, Fuse plans to expand its team, secure additional regional licenses, and enhance its product offerings beyond the UAE.
For more insights into fintech developments in the MENA region, visit TechCrunch or check out our Fintech News section.
