Mellow Fellows, a fintech company based in Egypt, has completed the first stage of its series B funding round, raising $31 million.

The funding had participations from a number of investment firms, including CommerzVentures, Middle East Venture Partners (MEVP), and Arzan Venture Capital. Other investment firms that participated in the fundraise are Invenfin, National Investment Company (NIC) and existing investors such as Partech, Sawari Ventures, 4DX Ventures, and P1 Ventures.

“The support we received from leading local and global venture capital firms in times of instability and scarcity of growth capital rounds is a testament to their faith and confidence in our business model, our team and the overall opportunity that lies in the Egyptian market,” founder and CEO, Ahmed Wadi, said.

With the funding, the startup said it will accelerate its exponential growth by diversifying its portfolio of services and expanding its product offerings across the B2C and B2B segments. Also, Money Fellows said it will scale its geographical expansion across Africa and Asia.

Money Fellows was founded in 2016 by Ahmed Wadi. He tested the system in Germany while he stayed in the country. Wadi was faced with the problem of accessing financial services because he lacked a credit history. He got the idea of recreating the Egyptian gameya system in the European nation, and provide an alternative financing system for people like him. Money Fellows then leaped into the UK, however, adoption of the system was not widespread.

“Germany didn’t have this culture and at some point, it felt like it made sense to go to the U.K. where they have Asians, Africans, and Arab communities that traditionally use this model, but we found out people didn’t need it because they had an advanced financial system,” Wadi said.

Wadi later moved to Egypt for his third try, realizing that Egypt already has a traditional gameya system.

Mellow Fellows is a mobile-based platform that digitises money circles or Rotating Savings and Credit Associations (ROSCAs) (called Esusu or ajo in Nigeria, Kameti or chit fund in India and Gameya in Egypt). The startup works as a collaborative group lending and savings platform, giving individuals access to interest free credit and better saving achievements.

Read also: Central Bank of Eswatini moves to introduce digital currency

Speaking on the funding, CEO, Ahmed Wadi said:

“We are proud to share with our stakeholders and our users the progress and growth which led MoneyFellows to become one of the market-leading fintechs in Egypt, facilitating financial inclusion and digital transformation in the country. We wouldn’t have reached such an important funding milestone without the firm backing of our existing investors who understand and support the company’s vision as well as the perseverance and belief of our new partners in the company and the team’s ability to execute. […] The support we received from leading local and global venture capital firms in times of instability and scarcity of growth capital rounds is a testament to their faith and confidence in our business model, our team and the overall opportunity that lies in the Egyptian market.”

Commenting on the funding, Hangwi Muambadzi, venture partner at CommerzVentures, said:

“We are incredibly excited to partner with the company as they begin the next phase in their growth journey. Ahmed and his stellar team have delivered a transformative solution that will continue to enable millions to achieve their financial goals. Rotating Savings and Credit Associations have been deeply embedded in emerging markets across the world for centuries. It is brilliant to see this new digital ROSCA-driven model emerge from Africa, creating a trusted model of delivering financial solutions and setting a new standard on using localised solutions to solve for global opportunities.”