DUBAI, United Arab Emirates — Saudi fintech start-up Lean Technologies has won a $33 million Series A round funding injection from Sequoia Capital India, marking the firm’s first foray into investing in the Arab Gulf region.

Sequoia Capital India’s fund is in the same family as U.S.-based venture capital giant Sequoia, which has previously backed Google and Stripe. Its fund is independent, however, and its capital commitment to the Saudi fintech’s Series A round is joined by other international investors including New York-based Liberty City Ventures and former General Electric CEO Jeff Immelt.

Riyadh and London-based Lean Technologies launched its platform in 2019, enabling third-party financial services providers to access their customer’s bank data and instantly initiate payments.

The firm’s APIs — or application programming interfaces — are essentially what let different systems talk to each other. That technology is key to open banking, which is what’s enabled fintech firms to disrupt traditional banks and bring new services to users in areas like e-commerce, accounting and banking.

“We see ourselves ultimately as enablers, supporters of the [fintech] ecosystem and as hopefully bastions of a new wave of fintech innovation that will enable and spur a lot of very exciting changes in the lives of everyday people and businesses,” Hisham Al-Falih, Lean’s co-founder and CEO told CNBC’s Dan Murphy ahead of the new investment announcement on Thursday.

The $33 million investment comes after Saudi Arabia’s move last year to launch a legal framework for open banking, presenting new opportunities for fintech companies in the Gulf region. Open banking in the last decade has already been introduced across more than 55 markets globally, including in Europe and the U.S.

The Kingdom Tower, operated by Kingdom Holding Co., centre, stands on the skyline above the King Fahd highway in Riyadh, Saudi Arabia.

Simon Dawson | Bloomberg | Getty Images

The technology, Lean’s CEO says, is “not only for retail accounts, but also for SME accounts. So you can imagine that this is the plumbing for fintech. And what this will enable is a whole new wave of use cases that previously were untapped, underutilized.”

This will speed up the creation of new businesses and platforms, Al-Falih added. “If we think about personal financial management, savings, robo-advisory and investing, cryptocurrency investments as well, and a variety of other use cases that previously were either hindered or blocked all together, and hopefully with the introduction of infrastructure, like Lean, we’ll see those businesses come to light and come to the market way faster.”

‘Astounding growth’

With the kingdom undergoing its own economic transformation driven by Saudi Crown Prince Mohammed bin Salman’s Vision 2030, a new framework for finance and banking — one that is on par with those already established in developed markets — is essential, entrepreneurs in the sector say. This has spurred growth in the industry by those pursuing greater financial inclusivity.

“Fintech has witnessed astounding growth over the past two years in the MENA Region,” said Rayan Dawud, an investment partner at Dubai-based firm Outliers Venture Capital, which is an investor in Lean Technologies. “Open banking will lower transaction costs and offer access to sophisticated data sets, fueling the next generation of regional fintechs.”

The numbers don’t lie. “We’ve seen fintech investments grow from around $144 million, which was quite sizable, in 2020 to almost $400 million in 2021,” Al-Falih said, referring to the Middle East and North Africa region. “That, if anything, justifies and signifies the amount of confidence and the amount of excitement that venture investors have about the fintech industry, and that similar trend was exhibited globally.”

Lean Technologies, which was founded in September 2019 and launched its flagship data and payments APIs in February 2021, has now gathered dozens of the region’s financial players as clients, and processed hundreds of millions of dollars in transactions. 

Lean’s existing venture investors, in addition to Outliers, include Shorooq Partners in Abu Dhabi as well as angel investors from the U.S. like Henrique Dubugras, CEO of financial services company Brex, and Samir Vasavada, founder of AI-powered investment management firm Vise.

The move toward an established open banking framework in the region could open doors to many more fintech services, fostering competition and allowing users greater options for managing finances and businesses. 

“The Saudi fintech ecosystem has seen rapid growth over the past two years, driven by progressive engagement by regulators, increased funding appetite, and demand for services from the young, mobile-native population,” Dawud said.

With almost 70% of the kingdom’s 34 million-strong population under the age of 30, open banking is set to provide a lucrative market for fintech providers, start-ups, and investors alike, Dawud said, adding: “we have no doubt that the future will be a bright one.”



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