In 2016, the member states of the Gulf Cooperation Council (GCC) signed a Value Added Tax (VAT) agreement that paved the way for the common application of a tax on consumption across the region. The United Arab Emirates (UAE) and Saudi Arabia became the first member states to ratify the treaty in 2018, and its implementation means businesses for the first time. Businesses in these territories must file periodic VAT returns.
Nadim Alameddine, a UAE resident, said he immediately saw an opportunity in the accounting field as businesses sought to file tax returns as required by the new law. This inspired him to debut wafeq in 2019, a startup that initially provided accounting services and then, in 2021, launched a scalable e-invoicing and accounting SaaS solution focused on customers in UAE and Saudi Arabia.
Wafeq is currently exploring new growth opportunities in Egypt while doubling down on existing markets as compliance businesses with financial and accounting requirements evolve. The growth plans follow a $3 million seed funding it secured in a round led by Raed Ventures and with participation from Wamda Capital.
“There are regulatory changes going on in Saudi Arabia and Egypt, and that’s what we’re trying to capitalize on at the moment… we’re also doubling the amount on existing markets. There’s where we’ve had good traction,” Alameddine told TechCrunch.
Egypt and Saudi Arabia are now requiring businesses to comply with electronic invoicing, which has led to an increase in demand for the accounting software that Wafeq is tapping through through its enterprise product (API) mine.
Wafeq is an approved supplier in Saudi Arabia and the United Arab Emirates (where electronic invoicing is not yet required). The startup is also in the process of seeking approval from the Egyptian Tax Authority. Alameddine said the North African country offers great opportunities for startups as it is home to millions of small and medium-sized businesses.
On the other hand, its accounting platform makes it easy for customers to create VAT returns, manage inventory, payroll, invoices, and track expenses. It also generates actionable financial reports and insights for businesses.
“We position ourselves as a full-fledged accounting software for small and medium businesses, and we offer three different packages that cater to businesses looking to submit compliant invoices, manage accounts receivable,” says Alameddine. their payables or who are looking for a full accounting solution that includes payroll and inventory management services.
Currently, more than 630,000 invoices are generated each month through its platform, with the total monthly invoiced amount exceeding $117 million. They predict this will boom after its growth plans.
Commenting on the deal, said Talal Alasmari, founding partner of Raed Ventures; “We are delighted to support Wafeq as they address an issue affecting thousands of businesses in the region. The digitalization of accounting operations will really change the way SMEs operate here, increasing operational transparency, creating efficiency and contributing to economic growth.”