Catalyst Partners Middle East, Egypt’s first special purpose acquisition company (SPAC), is poised to acquire Qardy, a recently funded digital lending platform, in a landmark transaction for the country’s fintech and investment sectors. The acquisition, announced by Catalyst in a company note, will be executed through a full or partial share swap, involving the issuance of new shares in Catalyst’s capital in exchange for the entire equity of Qardy.
The move reflects a growing appetite in Egypt for innovative financial solutions and represents a significant milestone for both Catalyst and Qardy. Catalyst Partners Middle East, an affiliate of the impact investment advisory firm Catalyst Partners, became Egypt’s first SPAC after receiving approval from the Financial Regulatory Authority (FRA) in September. The acquisition signals a strategic step towards consolidating fintech assets in the country.
Qardy’s Rapid Rise
Founded in July 2022, Qardy is Egypt’s first digital lending marketplace, connecting financial institutions with micro, small, and medium enterprises (MSMEs) seeking financing. The platform has forged partnerships with national and commercial banks as well as leasing, factoring, and microfinance companies to provide tailored financial programs. These offerings support MSMEs’ working capital and expansion needs, helping address a significant gap in access to finance in Egypt and the broader MENA region.
Qardy’s traction in the fintech space has been remarkable. The platform has attracted over 6,000 corporate clients and facilitated loan transactions exceeding $12 million since its launch. In August, the company secured a seven-figure pre-seed investment round, with contributions from White Field Ventures, Vastly Valuable Ventures, and a group of angel investors. The funds are intended to expand Qardy’s regional footprint and enhance its technological infrastructure, further solidifying its position as a leading financial hub for MSMEs.
The acquisition of Qardy is part of a broader strategy by Catalyst to establish a foothold in the fintech and non-banking financial services sectors. Catalyst’s chairman, Maged Shawky, has previously stated the company’s intention to acquire between six and ten companies, including at least two in these sectors. The integration of Qardy aligns with this vision, enabling Catalyst to leverage Qardy’s strong market position and technological edge.
Catalyst took significant preparatory steps to facilitate the acquisition. Last month, it offered 1 million shares on the Egyptian Exchange at a nominal value of EGP 10 per share, raising its total issued capital to EGP 10 million. Earlier this month, the company’s extraordinary general assembly approved a capital increase to EGP 235 million through the issuance of 22.5 million additional shares, also priced at EGP 10 per share. Investors have until Thursday to subscribe to the capital increase, which has been approved by the FRA.
The acquisition highlights Egypt’s evolving financial ecosystem and its efforts to foster innovation in fintech and financial services. Qardy’s focus on MSMEs aligns with national priorities to boost economic inclusion and empower small businesses, which constitute a significant portion of Egypt’s economy. For Catalyst, the Qardy deal represents a pioneering use of the SPAC structure to drive investment in emerging sectors.
As SPACs continue to gain attention as a vehicle for accelerating growth-stage investments, this transaction could pave the way for similar deals in the region. With Qardy ’s strong performance metrics and Catalyst’s strategic vision, the SPAC acquisition has the potential to become a blueprint for integrating fintech innovation with traditional financial market structures.