"We Got Funded!" Bahrain-Founded Tarabut Gateway Raises US$32 Million In A Series A Round With offices currently located in the UAE and Bahrain, the company now aims to make a mark in the growing Saudi finance market using this new infusion of capital.

Tarabut Gateway, a Bahrain-founded open banking platform, has raised US$32 million in a series A round led by Pinnacle Capital, a Saudi Arabia-based alternative investment firm.

Tarabut Gateway's Series A round also saw the participation of Aljazira Capital, a Saudi Arabia-based Shari'ah compliant financial services firm; Tiger Global, a US-based investment firm focused on global Internet, software, consumer, and fintech sectors; and Visa, a US-headquartered global digital payments tech platform.

Following this funding round, Visa and Tarabut Gateway also entered into a strategic partnership that will allow both entities to collaboratively work towards developing new products and solutions that use open banking capabilities.

Launched in 2019, Tarabut Gateway offers open banking application program interfaces (APIs) that promise secure and instant flow of money, as well as financial information across a network of banks and fintech companies in the region. With offices currently located in the UAE and Bahrain, the company now aims to make a mark in the growing Saudi finance market using this new infusion of capital.

"Our primary focus following the Series A fundraise is deploying capital to grow Tarabut Gateway's presence in the Kingdom of Saudi Arabia," Abdulla Almoayed, founder and CEO of Tarabut Gateway, said. "The KSA's fintech market is one of the fastest growing in MENA, presenting an extraordinary opportunity. Our plan is to hire top talent in the country, further develop our local presence, and strengthen our partnerships with fintechs and banks. Additionally, we aim to reinforce our position in Bahrain and the UAE by increasing bank coverage and enabling more fintechs to build their solutions through our open banking API. We are closely monitoring open banking regulations across all MENA jurisdictions, and we are ready to enter new markets swiftly if the regulatory environment becomes favorable."

But while geographical expansion has been clearly mapped out for Tarabut Gateway's journey forward, Almoayed adds that a major part of the funds will also be allocated towards ensuring greater innovation in his enterprise's services. "On the technology and product front, the fundraise will be used to advance our existing products: Tarabut Gateway (TG) Connect, unifying customers' financial data with region wide bank connectivity; TG Categorization, enriching data to allow auto-categorization of transactions; TG Pay, enabling direct, fast, and cost-efficient payments; and TG Income Verification, helping lenders streamline loan application processes, to just name a few," he explains. "We are particularly focused on lending solutions that empower lenders to optimize revenue and reduce costs. Our solutions help lenders streamline their application and underwriting processes and improve their credit decisions. Our open banking solutions also power other use cases, such as personal finance management, bill payments, and account top-ups for digital wallets."

Related: Focused On The Future: Mohammed Alblooshi, Head Of DIFC Innovation Hub And FinTech Hive

Take a quick look at the trends and consumer behaviors that currently rule the regional finance market, and it'll be easy to see how Almoayed's vision for Tarabut Gateway's future is deeply linked to the ongoing shifts in the ecosystem. The UAE in particular has been at the forefront of MENA's fintech boom, having recorded a market value of US$2.5 billion in 2022 (as per the UAE Ministry of Economy). A report by Magnitt also highlights that the MENA fintech market recorded $925 million in funding across 131 deals in 2022 alone- a statistic that is reflective of the confidence shown in the sectors by investors.

Abdulla Almoayed, founder and CEO, Tarabut Gateway. Source: arabut Gateway.

But when it comes to the growing interest in, and demand for, open banking services in particular, Almoayed notes that it has been the result of the contribution of a number of factors. "Firstly, regulators in the GCC, such as Saudi Central Bank (SAMA), the Central Banks of Bahrain and the UAE, the Dubai International Financial Centre and Abu Dhabi Global Markets have played an instrumental role by creating and implementing forward-looking policies and regulations," he notes. "This has facilitated the introduction of open banking concepts and allowed fintechs to capitalize on emerging market opportunities. Secondly, banks and other financial institutions have proactively embraced open banking, recognizing its potential benefits rather than perceiving it as a threat to their business. There was and still is a lot of appetite from banks to integrate with fintechs and other third-party service providers, resulting in enhanced service offerings which help banks retain existing and attract new customers."

However, apart from regulatory assistance and collaborative efforts within the ecosystem, there is also one key factor that will perhaps continue to be the most important deciding element in how open banking fares: consumer behavior. "Tech-savvy consumers increasingly demand personalized products, fast and secure transactions across various merchants, and greater control over their personal finances," Almoayed says. "This has spurred fintech innovation, as evidenced by Mastercard's report that 89% of people in the KSA used a fintech-enabled payment method in 2022. This shift in consumer behavior appears almost natural in retrospect. As soon as regulatory changes allowed for innovation, consumers gravitated towards user-friendly financial products that leveraged new technologies to simplify their lives. Prior to this regulatory shift, the MENA financial sector lagged behind North America and Europe, with unmet consumer needs."

The acute awareness displayed by Almoayed and his team has certainly stood them in good stead, and even earned them the support of regional and global investors. "Tarabut Gateway's innovative approach to open banking and their strong focus on Saudi Arabia make them a perfect partner for us, and we're excited to see them grow to new heights and contribute to the growth of the Saudi Arabian fintech space as part of the Vision 2030 strategy," Abdulwahab Al Betairi, Founding Partner of Pinnacle Capital, says. Andrew Torre, Regional President of Visa CEMEA, expresses similar sentiments when he adds, "Next-generation digital experiences and innovation are driving the future of financial services, and open banking is a growing movement that can help consumers better access and manage finances. We look forward to partnering with Tarabut Gateway, combining our global payments network and proven local solutions with their open banking platform to allow innovative financial services across the region."