Egyptian fintech startup Telda, backed by prominent global investors including Sequoia Capital, has announced its acquisition of local securities brokerage firm City Capital, marking a significant step in its ambition to become a comprehensive digital financial services platform. The move comes on the heels of a landmark regulatory approval from the Financial Regulatory Authority (FRA), granting Telda Securities Brokerage the licence to operate using financial technology across all relevant areas for the first time in Egypt.
The acquisition positions Telda as the first application in the Egyptian market to integrate prepaid card issuance, payment services, money transfers, and stock and mutual fund trading within a single user interface. This development is poised to democratise investment in the Egyptian Stock Exchange (EGX), potentially opening up the market to millions of new customers who can now buy and sell equities directly through the Telda app.
Founded in 2022 by Ahmed Sabbah and Youssef Shalqami, Telda initially focused on providing digital spending accounts and payment solutions targeted at millennials and Gen Z. The company quickly gained traction, securing $20 million in seed funding in the same year, with participation from Global Founders Capital (GFC) and Block Inc. (formerly Square) alongside Sequoia. By 2023, Telda reported 1.5 million app downloads, 500,000 active users, and processed transactions worth $300 million, demonstrating a strong appetite for its digital-first approach to financial services.
The newly secured brokerage licence represents a major expansion of Telda’s offerings, aligning with its stated goal of transforming how people in the Middle East, North Africa, and Pakistan (MENAP) region interact with their finances. “Telda is on a mission to simplify financial services for Egyptians and facilitate payments in their daily lives,” stated CEO Ahmed Sabbah. “By adding stock trading to the app, we are making investment opportunities accessible to millions of Egyptians.”
The acquisition of City Capital, while the financial details remain undisclosed, provides Telda with the necessary infrastructure and expertise to offer brokerage services. City Capital, as a licensed securities brokerage firm, already operates within the regulatory framework of the EGX. This strategic move allows Telda to bypass the lengthy process of independently building a brokerage operation from the ground up.
Youssef Shalqami, Telda’s Chief Technology Officer, hinted at further innovation, suggesting that this acquisition is “just the beginning of more innovations to come.” Meanwhile, Hisham Ibrahim, Managing Director of Tilda Holding for Financial Investments in Egypt, emphasised the strategic importance of this step, stating it is part of Telda’s broader ambition to become a “comprehensive destination for providing all non-banking financial services through financial technology.” He also acknowledged the support of the FRA in enabling Telda to expand its services.
The FRA’s decision to grant Telda Securities Brokerage a full fintech licence is a significant development for the Egyptian financial landscape. It signals a growing willingness by regulators to embrace technological innovation and facilitate the entry of new players into traditionally established sectors like brokerage. This move could pave the way for other fintech companies to explore similar expansions, potentially fostering greater competition and innovation within the Egyptian financial services market.
According to Telda, the timing of this expansion aligns with a growing interest among Egyptians in managing and investing their money. The company is banking on the user-friendly interface of its app to attract both seasoned investors and newcomers seeking a convenient and accessible way to participate in the Egyptian stock market.
Telda’s rapid growth and strategic moves highlight the increasing dynamism of the Egyptian fintech sector. The backing of prominent international investors like Sequoia Capital highlights the potential they see in the market and in Telda’s vision. Sequoia Capital, known for its early investments in tech giants like Apple, Google, and WhatsApp, has been increasingly active in emerging markets, recognizing the opportunities presented by digitally savvy populations and evolving regulatory environments.
The integration of brokerage services into Telda’s existing platform could have a profound impact on retail investment in Egypt. By lowering the barriers to entry, such as the need for traditional brokerage accounts and complex trading platforms, Telda could encourage greater participation from a wider segment of the population, potentially boosting liquidity and activity on the EGX.
Telda’s acquisition of City Capital and the accompanying regulatory approval mark a pivotal moment for the company and for the broader Egyptian fintech ecosystem. As the first platform to offer a fully integrated suite of digital payment and investment services, Telda is well-positioned to capitalise on the growing demand for accessible and user-friendly financial solutions in Egypt.